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Mt Kenya coffee farmers set for windfall from direct export sales

BUSINESS
By Nderitu Gichure | Apr 23rd 2022 | 3 min read
By Nderitu Gichure | April 23rd 2022
BUSINESS
Framers sorting coffee berries at a stall in Embu, November 26, 2021. [Muriithi Mugo, Standard]

Coffee farmers in the Mt Kenya region are expecting a financial windfall, thanks to improved product quality and direct sales in the international market.

Officials from several cooperatives said good grades, increased direct sales overseas, increased production and reduced operational costs have favoured farmers, who will now receive better earnings.

Gachatha factory chairman Peter Mathenge said most grade AA, AB, BB, and C coffee (90 per cent), which is mainly considered for export, was produced by 1,500 farmers.

“For the last two years, we have managed to pay our farmers over Sh100 per kilo owing to improved quality and enhanced access to markets through direct sales,” Mr Mathenge said.

He noted the factory has announced the highest payment rate in Nyeri this year at Sh120 per kilo, compared to last year’s Sh106 per kilo which totalled to Sh90 million from 719,000 kilograms.

Mr Mathenge added the acquisition of more efficient pulping machines helped improve the quality of parchment since they have little tear on beans, and save water and electricity costs.

“Farmers are now producing high-quality beans as the machine does not nib or break beans during pulping, guaranteeing good quality that will fetch a premium price in the market,” said the chairman.

He further attributed the favourable rates to increased direct sales overseas, which he noted accounted for over 90 per cent of all the coffee produced. The rest of the coffee was sold through auction.

The same was replicated in Kiandu factory where over 1,200 farmers secured 85 per cent premium grades, with only 10 per cent of coffee being sold through the auction. Around 80 per cent was sold through direct sales.

Factory chairman Kariuki Mundia pointed out that production also went up due to favourable weather conditions that saw the factory produce 609,669 kilos for the 2020/2021 season against 329,671 kilos in the last season.

Earnings from the produce, he noted, had also gone up from Sh30 million over the same period to Sh66 million.

“Production of coffee has also gone up tremendously as more and more farmers and young people are getting attracted to coffee farming,” Mundia said.

Other societies have also announced rates of over Sh100. They include Thiriku, which paid Sh110 up from Sh100 last season.

Factory chairman Karoki Waiganjo said production also shot up from 170,000 kilos in 2020/21 to 305,000 kilos, earning a total of Sh39 million up from Sh20 million.

He said the factory produce was being sold directly to Trabocca BV from the Netherlands under a five-year agreement with a minimum guarantee of Sh100 per kilo.

Kamau Kuria, the managing director of Coffee Management Service (CMS) said global demand for the product now stands at 172 million bags against production of 158 million bags.

“Coffee production in the world has a shortfall of 14 million bags as demand in the global market is on the rise,” Mr Kuria said.

He said the international market is facing a severe shortage of quality Arabica coffee due to drought and frostbite in Brazil, which is the main global supplier.

He, however, noted that local production is still low at 28,000 metric tonnes.

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