Coffee Earnings Drop as Crop Season Ends

The weekly coffee prices declined marginally at the Nairobi Coffee Exchange, with a 50 kg bag dropping to $226 (26,080 shillings) from $228 (26,311 shillings) in the previous sale.

The season which began in November last year, has seen the crop sustain the market until February, when the high-quality bean ratio started reducing, pushing the commodity prices downwards.

“The quality has gone down now as we come to the end of the season; that is why the prices have been declining,” NCE chief executive officer Daniel Mbithi said.

The latest sale was the second last sale of the season as the auction plans to take a one-month recess in May as the main crop period comes to an end. The auction will then resume in June, where it will be banking on the short-season crop from eastern and parts of western Kenya until November, when the main crop season will hit the market again.

On Tuesday, farmers opposed the ministry’s proposal to amend Coffee Regulations. The draft Coffee Amendment Regulations 2022 proposes that the Capital Markets Authority (CMA) be denied the supervision role of the Nairobi Coffee Exchange.

The proposed regulation is also seeking to introduce new entities to carry out the milling and marketing of growers’ coffee.

Farmers led by Francis Ngone, chairman of the National Coffee Cooperative Union (NACCU), said they want CMA to be allowed to supervise the auction as proposed under the Coffee reform agenda. The farmers termed the new proposal to disempower farmers by giving other parties control of the value chain.

In the current regulation, licensing is usually done by the county government. However, passing out the new proposal will give the Agriculture and Food Authority (AFA) powers to license miller marketers.

The ongoing reforms paved the way for coffee farmers to control the value chain, including selling their produce directly or through the Nairobi Coffee Exchange without requiring additional marketing licenses.

The government granted a one billion fertilizer subsidy to coffee farmers to help them maximize their earnings. So far, 45 000 out of the 80,000 coffee farmers registered with the New Kenya Planters Cooperative Union (KPCU)have benefited from the subsidy program, covering the purchase of pesticides.

The subsidy program, which is being tested in Nyeri, Murang’a, and Kirinyaga Counties, will see coffee farmers cover 60 percent of the cost while KPCU will cover the remaining 40 percent of the total cost.

The major coffee growing regions in Kenya are the high plateaus around Mount Kenya, the Aberdare Range, Kisii, Nyanza, Bungoma, Nakuru, Kericho, and a smaller Scale in Machakos and Taita Hills. The country has one of the best coffees globally that is highly sought after by roasters for blending with other low quality from other regions.