State investigates 'missing' coffee as millers hold over 100,000 bags

Eunice Wanjiru harvests coffee at Muthinga village in Tetu, Nyeri, on September 27, 2023. [Kibata Kihu, Standard]

As the government takes the battle to the cartels it accuses of choking the lucrative coffee sector, teams of detectives and State spies have been dispatched to a number of millers across the country.

The spies and the sleuths are part of a multi-agency team trying to unravel the mystery of the whereabouts of large amount of coffee at a time when the Nairobi Coffee Exchange has been starved of the commodity.

The Sunday Standard has established that as the volume of coffee produced at Nairobi Coffee Exchange (NCE) continues to fall sharply, the State has now formed a team to verify the stock of coffee parchment held by private millers, the largest stakeholders in the sector.

The multi-agency team includes officers from the Directorate of Criminal Investigations (DCI) National Intelligence Service and those drawn from the National Government Administration Officers.

A letter from Agriculture Food Authority (AFA) acting Director General Willis Audi, and addressed to the seven millers shows the verification started on September 27 and was to continue up to September 29 (Friday) from 9am to 5pm.

“Kindly accord the necessary support to the team to accomplish this activity within the shortest time possible,” the letter read in part.

The millers addressed included Sasini Mills, Coffee Management Services, NKG Coffee Mills, Kofinaf Mills, Kahawa Bora Mills, Gatatha CFC Mills, Central Kenya Coffee Mills, Baringo Cha Coffee Mills and Hema Coffee Mills.

Commercial Coffee Millers and Marketing Agencies Association Chairperson James Muriithi confirmed that the officers visited their offices and demanded to be shown the coffee produce that they have been receiving from farmers.

“We cooperated with the officers and provided them with details that they wanted including the produce from farmers,” the chairperson told The Sunday Standard on phone.

He said all the seven millers are holding over 100,000 bags of coffee produce as farmers continue to take their produce to their stores but are unable to engage in the sale of coffee due to the revocation of their licences.

“We have a binding milling and marketing agreement with farmers and despite the revocation of our licenses, they (farmers) have continued to bring their coffee to our stores due to confusion and security concerns about their produce,” Muriithi noted.

From tomorrow (Monday), the agreement between millers and farmers will have expired. Millers and coffee farmers are in the dark about what will happen next.

The agreement runs from September to October 1, this year.

“Our doors will be shut from tomorrow and we shall not accept any produce from farmers in the spirit of supporting and adhering to the reforms but we are consulting with the government,” he added

A State officer who spoke to The Sunday Standard on condition of anonymity said the team wanted to verify and ascertain the amount of coffee produced by the private millers as some government officials have publicly denied that farmers have continued to take their produce to the private millers.

“The crisis is here with us because the private millers that have been christened cartels mill and market the largest share of Kenya’s coffee amounting to 86 per cent which accounts for 51000 tonnes while they market 93 per cent of the produce,” he said.

According to AFA’s Coffee Yearbook 2021-2022, NKG Coffee Mills had the highest milling share in the 2021-22 coffee year at 24.6 per cent, followed by Central Kenya Coffee Mill (18 per cent), Kofinaf (15.4 per cent), Kahawa Bora (13.9 per cent) and Sasini PLC (8.8 per cent). Data from NCE shows auction volumes in August dropped by 95.62 per cent to 192 tonnes from 4,380 tonnes at the same time last year.

Registered buyers

NCE chairperson Peter Gikonyo said buyers are also not turning to buy the commodity, noting out of the 121 registered buyers, only 20 to 25 buyers are turning up for the market saying the low rate affects competition in bids, a move that may result in poor prices.

“This is an area that needs to be relooked at because we need to find out why we have more registered buyers who do not turn out for the auction. Last year more than 50 buyers turned out for the exercise,” he said.

He called for the introduction of a coffee cupping laboratory to aid in tasting and aromas and flavours of brewed coffee. “This will reduce physical sampling of the quality of our coffee and inform farmers to focus on the value of their produce,” he said.

The ongoing crisis at the NCE has seen international buyers stay off the market, reducing the demand for Kenyan coffee which has coincided with the reforms in the coffee sub-sector that is being spearheaded by Deputy President Rigathi Gachagua.

In the four sales at NCE, only 17,194 bags have been traded, a decline compared to last year.  AFA in its report described last year as historic in terms of coffee production as there was an increase of 50.24 per cent - the highest crop recorded per year in the last two decades in Kenya.

The value increased by 4.3 per cent to $227.33 million (Sh34.05 billion) at an average price of $293.03 (Sh43,950) per 50 kg bag compared to $141.24 million (Sh21,186) at an average price of $281.07 (Sh42,150) per 50kg bag in the previous season,” the report read.