Kenya coffee earnings jump 17pc in 2013/14 crop year

Kenya: Kenya's earnings from its coffee exports rose 17 per cent to $254.2 million (Sh22.9b) during the 2013/14 (Oct-Sept) crop season due to improved production and higher prices, the industry regulator said on Thursday.

The East African nation is a relatively small coffee grower compared with other producers, but its speciality beans are known for their quality, attracting demand from roasters.

Kenya's Coffee Directorate said farmers benefited from subsidised fertiliser from the government during the period, helping them raise production by a quarter to 49,475 metric tonnes.

Kenyan growers also benefited from better prices after the average auction price of the commodity increased to $212.7 per 50-kg bag in 2013/14 from $166.7 a year earlier.

Uncertainty about the crop in leading producer Brazil after a long drought helped prop up global prices of coffee in 2014. Brazil grows about 40 percent of the world's arabica beans, which is the main ingredient in most commercial coffee blends.

Kenya secured four new export markets for its coffee in the 2013/14 season, the directorate said. "Besides traditional European and US markets, other non-traditional markets expanded to Turkey, Bulgaria, Seychelles and Zambia with Zambia mainly absorbing roasted coffee," the regulator said.

Increase output

It said Kenya is expected to produce 45,000 metric tonnes of coffee in 2014/15, fetching $150 million from an estimated average price of $200 per bag. In 2011, local coffee farmers earned as high as Sh150 per kilogramme but later declined to between Sh40 and Sh80 per kilogramme in the last one year.

Agriculture Principal Secretary Sicily Kariuki said the Government has launched a new approach to increase output.

"This is a motivating factor for farmers and as the national government charged with policy making we will continue to enforce more reforms," she said last year.

Ms Kariuki spoke during a coffee stakeholders' meeting in Nairobi, organised by the African Fine Coffee Association (AFCA) in Nairobi.

The optimism in the coffee industry was spurred by increased prices for the premium grades -AA and AB. Industry players say demand for local coffee beans both at the auction and through direct sales are fetching prices in excess of Sh560 per kilogramme.

At the Nairobi Coffee Auction late last year, the average price of coffee offered for sale reached Sh21,708 compared to Sh20,428.20 registered previouslt. Premium grades AA and AB fetched Sh27,158.40 compared to Sh22,057.20 respectively.

Grade PB and C fetched Sh22,277.70 and Sh20,274.30. Quality coffee prices had been oscillating at between Sh24,300 and Sh37,620 per 50kg bag of clean coffee.

Various coffee-growing counties and coffee firms are fast-tracking planting programmes to increase production.

Last year, the average prices of coffee were below $200 (Sh18,000) per 50kg bag. Ms Kariuki noted that the Ministry launched a national coffee production strategy emphasising production and productivity.

Implement actions

"Through the strategy, all players are being mobilised to implement actions that spur productivity. The approach will involve the national and county Governments, farmers and organisations," she said.

"In this way it will be easier to increase production and thus expand Kenya's share in the international market," Ms Kariuki added.

She said the subsidised fertiliser programme would be expanded to cover coffee farmers in addition to providing affordable credit.

She said production could increase to 60,000 tonnes in two years compared to the current 49,000 tonnes.