Usda gain report/Kenya – Production on rise, but still low

Washington – Coffee Board of Kenya (CBK) estimates production for MY 2005/06 at 52,000 tons (2004/05 45.245 tons). FAS estimates production for 2006/07 at 55,000 tons. The upsurge is attributed to favourable weather, increased production from non-traditional coffee farming areas and improved coffee prices. Despite a resumption of improved husbandry during 2005/06 the ‘on cycle’ tree production potential for 2006/07 is still low. A prolonged period of less than adequate farm husbandry during the past crisis years due to low coffee prices has reduced crop potentials. Wide fluctuations in production due to climatic and price influences will continue to impact on recorded volumes and the long term trends expected to be influenced by profitability.

Price instability has resulted in the intercropping of coffee with other crops among small-scale farmers, to improve income and food supply. This has impacted negatively on both yield and quality of coffee. Coffee area is threatened as farmers from the main coffee growing region engage in more profitable agricultural enterprises. Emerging Interest from non-traditional coffee growing regions is likely to sustain area as the farmers shift from maize farming to coffee.

Estate coffee production has been on a general decline and is likely to continue unless existing policies are changed. Medium to large-scale farms use manual labour to harvest coffee making the cost of production very high. Some estates farmers have opted to quit coffee farming and adopt other more profitable enterprises and in some instances intercrop coffee with other food crops, a departure from purestand farming.

Second Window During the second half of 2006 the Government authorized the new legislation commonly known as the ‘Second Window’ to run parallel with the auction system. Prior to the new legislation coffee was marketed under the central marketing system of the Nairobi Coffee Exchange. The second window is defined as a contractual agreement between the growers and the marketing agent and a buyer located outside Kenya for the sale of clean coffee. The marketing agent must demonstrate ability to access overseas market, conduct market research and provide a bank guarantee to protect farmers’ money.

Coffee exports using the ‘second window’ is still minimal with many seeing it as an opportunity but still studying risks if any.