Farmers to take Sh3 billion hit as coffee prices plummet

A coffee worker at Gacatha Coffee Factory on July 4, 2019. Small scale coffee farmers have embraced the government agenda to revive the country’s coffee sector with a Sh3 billion cherry advance revolving fund to farmers with an interest of three per cent per annum. [Kibata Kihu/Standard]

Kenya’s earning from coffee is expected to drop by Sh3 billion this year due to increased supply at the global market.

Agriculture and Food Authority (AFA) said yesterday a glut mainly due to a steep rise in production from Brazil, Vietnam and Ethiopia has depressed prices.

However, AFA said increased local consumption, identifying more coffee specialty markets and creating transparency and accountability in the payment system would cushion farmers from the global market shocks.

“We are likely to witness a drop in total earnings from Sh23 billion in the 2017/18 financial year to Sh20 billion in this year’s coffee year,” said the Head of Coffee Directorate at AFA Isabella Nkonge in Mombasa.

According to the Nairobi Coffee Exchange (NCE), a kilo of coffee this week traded at Sh203 or Sh.10,199 per 50kg bag.

Coffee trade experts from 12 African countries meeting in Mombasa said farmers should be cushioned from the erratic global market by increasing local consumption and exploring new markets.

Farmers’ exploitation

The experts met to plan for the 18th Africa Fine Coffee Conference and Exhibition scheduled for February next year.

According to the African Fine Coffees Association Chairman Ishak Lukenge, the conference will, among other things, deliberate on how to end farmers’ exploitation.

"It will take a long, long time to address the feeling that farmers are being exploited, but we are determined to do so. We also want to end the triangular trade in the sector and promote local consumption,” said Mr Lukenge.