KENYA – Kenyan coffee farmers, under the Kipkelion Coffee Cooperative Society, are set to earn at least Kshs. 102.6 million (US$902,700) after bagging the lucrative South Korean coffee market.
According to reports by KBC, the farmers managed to directly ship 134.4 metric tonnes of coffee to Goodbeans, a processing company in the Asian nation, through their brokerage arm Kipkelion Brokerage Company.
The sale offered competitive prices for the produce from Kshs. 30 (US$0.26) to Kshs. 100 (US$0.88) per kilogram, and higher earnings for the farmers as the direct sale locked-out middlemen.
This is in line with the Coffee Reforms of 2016 aimed at increasing value for farmers by cutting off unscrupulous traders who were accused of ripping off farmers.
Implementation of the reforms has seen the Capital Markets Authority mandated to license brokers who facilitate trade between farmers and buyers.
So far, CMA has licensed five brokers among them Kipkelion Brokerage Company.
“For the first time in Kenya’s history, smallholder coffee farmers have done a complete vertical integration of the coffee value chain, displacing the predatory brokers and other greedy intermediaries who have denied us direct access to the market.
“We wish to boldly state that history is on the side of coffee farmers- we have Farmer-Centric Coffee laws, supportive County and National Governments working collaboratively to support us,” said Mathew Bore Kipkelion Brokerage Company.
The deal with Goodbeans benefits 9,582 small scale farmers drawn from the counties of Kericho, Nandi and Bomet.
This comes as Kenya’s monthly coffee earnings nearly doubled to US$90.4 million in January, benefiting from high global prices in the market, occasioned by a shortage of the produce.
According to the Nairobi Coffee Exchange (NCE), earnings jumped 90 percent from US$47.5 million in the corresponding month a year earlier, helped by a shortage of the produce in the market caused by frost in Brazil that affected production at the world’s leading producer.
Brazil, which is the top world supplier, produces up to 60 million kilos of coffee every year but the harsh weather conditions saw the Latin American nation lose up to 20 percent of its entire crop in the last season.
This created a shortage in the world market as Ethiopia also, the world’s fifth largest producer, saw farming activities interrupted by the conflict between the government and the militia in the Tigray region.
The good earnings were also boosted by growth in volumes, which was 64 percent higher in the review period when compared with the previous season.
The number of 60 kilogramme bags traded continued to surge from 132,149 in January 2021 to 217,034 in the review period.