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Blow to coffee farmers as price drops in international markets

Tuesday October 1 2019

coffee picking

A coffee farmer. FILE PHOTO | NATION MEDIA GROUP 

BARNABAS BII
By BARNABAS BII
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Coffee farmers have been dealt a blow after the price of the cash crop dropped in the international market due to oversupply despite a drop in production locally.

Leading marketing and promotion agents yesterday warned farmers about further price declines due to high volumes of quality coffee in the international market.

The global coffee market recorded 172 million bags this season, up from 163 million bags in the last period, said Coffee Management Services Mills MD Kamau Kuria.

That has resulted in an oversupply by nine million bags, leading to dipping prices.

“There has been excess coffee from major producing countries like Brazil, Columbia and Vietnam (and) that has impacted negatively on the prices of our coffee in the international market,” Mr Kuria said in Eldoret during a field day for coffee farmers from western Kenya.

DN body text: Kenya’s coffee production for 2019/2020 is estimated at 650,000 bags (each 60kg) compared with 750,000 this year, while the distribution is projected at 830,000 bags compared with 910,000 bags in 2018/19.

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DN body text: Reports by the Coffee Directorate show that farmers earned Sh9.04 billion last month against Sh11.8 billion in the same period last year.

A Nairobi Coffee Exchange (NCE) report indicates that a 50kg bag of coffee fetched Sh13,500 in the weekly trading, down from Sh15,600 in the previous sale.

The report further indicates that Kenya’s premium coffee grade AA recorded a much lower price this week at Sh18,000, down from Sh22,300 last week for a 50kg bag.

“We do not expect it to change much next season, but it will go up as farmers target to meet recommended international standards,” said Mr Kuria.

He urged farmers to insure the crop against losses caused by natural calamities and theft while in transit to factories. “Most farmers do not earn adequate returns from the crop due to failure to use modern production techniques, poor handling processes or theft during transportation for processing,” the MD said.

Rift Valley is emerging as the leading coffee producer in Kenya as production declines in central Kenya owing to changes in land use from agricultural to commercial and real estate.

The Coffee Research Foundation (CRF) says production in central Kenya declined drastically last season.

Farmers have attributed the drop to bad weather and low prices.

“Coffee-growing parts of the Rift Valley have favourable climate and soil that support high yields, compared with other areas of the country,” states a CFR report released last month.

The Rift Valley produced 65,618.50 tonnes of coffee last season against 19,573.38 tonnes the previous season as most farmers invest in the crop.

As a result, CRF has intensified seed production to help farmers access the right variety at affordable prices.

The main coffee-growing counties are Uasin Gishu, Trans Nzoia, Baringo, Kericho, Bomet and parts of Nakuru.

The crop got a boost from the recent Sh81 million allocation by the Coffee Development Fund and an additional Sh15 million by the government through Co-operative Bank last year that has motivated farmers to increase the acreage under the crop.