Coffee exports dip after farmers hold on stocks

Kenya’s coffee exports fell 42 per cent in August 2005 to 41,335 50-kg bags compared with 71,185 50-kg bags sold in August 2004, Coffee Board of Kenya statistics issued over the weekend showed.

The board said coffee export earnings were also down but less drastically when compared to export volumes, in part due to better global prices. Kenya earned Sh471 million ($6.43 million) in August this year compared with Sh605 million the same month in 2004.

Coffee experts attributed the decline to farmers holding back coffee stocks after the Government said it planned to allow farmers to sell their coffee directly to buyers abroad without passing through a central auction.

“Many farmers held up their coffee. They didn’t want to offload the coffee to the auction,” said Francis Gaitho, a Nairobi-based coffee consultant.

Currently all coffee must be sold through a central auction. Kenyan peasant farmers say bypassing the auction will boost their income as they cut the number of middlemen in the marketing chain. But supporters of the auction say it raises prices by encouraging competitive bidding.

Unlike its counterparts in the region, the state-run Coffee Board of Kenya rarely publishes monthly statistics after job cuts aimed at lowering costs left the board thinly staffed. Kenya produces some of the world’s top quality arabica beans used to blend with coffee from other origins.

Meanwhile, Tanzanian coffee prices were firmer at last week’s auction with eight lots originating from large estates selling at reserve prices, dealers said on.

“In general, the prices were definitely firmer. Farmers were getting well above export prices,” one trader said.

“There were two lots of estate quality coffee, nice coffee, that were taken at the very high reserve price the estate set.” — Reuters