Growers get nod to roast coffee beans for local market
Posted Monday, July 25 2011 at 00:00
The Coffee Board of Kenya has given growers the greenlight to roast and sell their beans in the domestic market as they wait for a law formalising the activity.
Restrictions imposed by the Coffee Act on production and marketing have been cited as hurdles barring the addition of value to the beans, slowing down expansion of the domestic market.
The Coffee Act Amendment Bill which has been pending in Parliament since 2005 has a clause that would allow value addition and local sale.
Due to delays in passing the legislation, the board administrative action provides a temporary measure.
However, roasters would be exposed if Parliament failed to pass the amendment or if their operations were challenged in a court of law.
The Bill has been revised a number of times following concerns raised by stakeholders occasioning delay. Several players have already expressed interest in roasting their coffee for domestic consumption.
“We have communicated it to farmers and seen quite some interest. We are expecting to see about five growers applying,” said Ms Loise Njeru, the Coffee Board managing director.
The board has established mechanisms to guide the new development and will need to study how the producers propose to implement their strategies before approving them.
This will allow the coffee watchdog to keep tabs on all domestic production and sale of coffee. The board is encouraging growers to collaborate among themselves and with other industry stakeholders for the new plans to be viable.
The domestic market is seen as key in creating alternative and additional markets for Kenyan coffee and firming up prices. “The domestic market is an important area we should be looking at, said Ms Njeru, adding, “There is a huge potential market for coffee in this country. The only problem is the quality and price of local coffee”.
According to a recent study carried out by the board, 15 per cent of Kenyans consume coffee which is mostly not of Kenyan origin.
Development of the domestic market is expected to buffer Kenyan farmers from wild fluctuations in the global coffee prices. “Inevitably the prices will change when market dynamics change,” noted the MD, adding that the domestic market will cushion local farmers from incurring losses.
Currently the industry is enjoying the best ever prices in its more than 100 years of existence. The price hike has been caused by a deficit in global supply.
Major global producers like Brazil are net consumers of their coffee, which keeps their prices more stable and internationally competitive.