US forecasts Kenya coffee output will remain flat next year

Kenya’s coffee production will remain flat in the 2015/16 crop season even as global output is forecast to rise by more than six million bags, outlook data published by a US agency shows.

The US Department of Agriculture (USDA) projects Kenya’s production for the year to July 2016 at 900,000 bags (or 54,000 tonnes), the same level as that expected from the crop year ended last week.

“Overall, Kenya’s coffee production in 2015/2016 will remain at the 2014/2015 level,” the USDA says the report. Previously ranked the second top export crop after tea, coffee is currently a distant fourth among foreign exchange earners, having been overtaken by horticulture and textile partly as real estate developers encroach on farms.

Good prices in the international market saw coffee fetch Sh19 billion last year, an 18.8 per cent growth over the previously year.

The performance, however, fell far behind Sh97 billion fetched by horticulture, the Sh94 billion generated by tea and Sh28 billion earned from textile exports.

The projections based on estimates obtained from the Agriculture Fisheries and Food Authority’s (Affa) coffee directorate indicate the local coffee industry will weather sustained assault by real estate developers in the next crop season.

“Production in newly planted and rehabilitated smallholder areas is expected to be balanced by the loss of large plantations in the suburbs of Nairobi to real estate developments,” it says.

The agency projects a total of 112,000 hectares will remain under coffee in 2015/16, same as the just ended year.

The year will, however, see world coffee production rebound by 6.4 million bags from the previous year to 152.7 million, driven by high production from Indonesia and Honduras as well as modest recovery in Brazil.

“Brazil’s Arabica production is forecast to improve 3.8 million bags to 38 million on favourable weather with Indonesia gaining 2.2 million more bags in the season to a record 11 million bags and Honduras pushing South America’s production by 600,000 bags,” USDA says.

The improved supply in the global market is likely to depress auction prices, hurting Kenyan farmers who rely on export of beans for processing abroad. Like other aspects of agriculture, coffee production has been devolved to counties.

The coffee directorate says counties in Rift Valley, Coast and Western are currently at various stages of enacting new coffee production and marketing regulations.

The USDA says: “Coffee production continues to face numerous challenges including, high cost of labour and inputs, erratic rains, high incidents of pests and diseases, competition from other farm enterprises, and poor governance of farmer organisations.”