KENYA – Kenyan coffee industry experts have warned against a significant decline in production, with forecasts estimating a drop to 750,000 bags by the end of 2024.
This warning comes from the 2024 Coffee Annual Report by the Foreign Agricultural Service (FAS) in conjunction with the Global Agricultural Information Network.
The decline is primarily attributed to the stagnation in the harvested area, currently at 105,000 hectares.
The report notes a worrying trend of farmers converting coffee farms into real estate, particularly in peri-urban areas like Kiambu, in hopes of better earnings.
Additionally, the establishment of new coffee farms has been hampered by a perennial shortage of certified planting materials due to funding constraints faced by the Coffee Research Institute.
Experts also highlight that lower yields, resulting from limited access to inputs and extension support for farmers, will further impact production.
The situation has been exacerbated by the state’s implementation of regulations in July 2023, which abolished marketing agents and prohibited businesses from holding multiple licenses throughout the value chain.
These reforms terminated crucial inputs, extension, and certification support programs that were previously provided by the de-licensed marketing agents.
Moreover, the new Direct Settlement System (DSS) platform, managed by the Cooperative Bank of Kenya, has led to inordinate payment delays as it becomes fully operational.
The system mandates that all payments for coffee sold through the Nairobi Coffee Exchange (NCE) be processed through the DSS. The new licensing requirements have also forced several large millers to cease operations, as farmers are now required to mill their coffee at specified mills.
According to the 2024 Economic Survey, coffee production in Kenya decreased by 6.2 percent from 51.9 thousand tonnes to 48.7 thousand tonnes in 2023. This decline has resulted in a drop in unit prices from Kes768.7 (US$5.95) per kilogram in 2022 to Kes708.4 (US$5.48) per kilogram in 2023.
The decrease in production was largely attributed to the coffee berry disease, which thrives in overly wet conditions. However, heavy rains in April-May 2024 are not expected to significantly impact production, as the early crop had matured by April, escaping damage from the disease.
The report also predicts a decrease in Kenya’s 2024 coffee exports to 720,000 bags from 750,000 bags in 2023 due to the lower domestic supply.
In 2023, the United States retained its position as the leading export destination for Kenyan coffee, followed by Germany, Sweden, South Korea, and Belgium.
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