Coffee industry renews push for minimum returns fund


A farmer tends to his coffee in Nyeri town. PHOTO | JOSEPH KANYI | NMG

The Kenya Coffee Planters Association (KCPA) has asked the government to implement the guaranteed minimum returns promise in the wake of poor prices that has seen the value of the commodity remain low for the past two months.

Peter Gikonyo, KCPA chairman, said the fund will be instrumental to cushioning farmers at a time the value of their crop is diminishing and is projected to remain low in the coming months due to a surge in production globally.

Coffee prices have remained low for the past two months, with a 50-kilo bag selling at less than $200 for the last two months from a high of $300 in May.

READ: Coffee price rebounds on quality beans being offered

President William Ruto in the run-up to the August election had promised farmers guaranteed returns from their produce as a measure of safeguarding the growers in times of loss.

“We want the government to implement the guaranteed minimum return as promised in the manifesto in order to improve the livelihood of farmers who are facing one of the lowest prices amid a rising cost in production,” said Mr Gikonyo.

The price of the produce on the global market is expected to be subdued in the current crop season following a rebound in production in Brazil, the world’s top producer of Arabica.

Kenya enjoyed good earnings from the beverage in the last crop year as a sharp decline in production saw the price of the commodity remain high during that period.

Coffee earnings in the last crop year grew to $210.7 million from $129.8 million a year earlier, garnering a 62.30 per cent rise.

The coffee crop year starts every October. Traders say favourable weather in Brazil has prompted tree flowering and is set to continue over the next months, leading to a bumper crop.

Daniel Mbithi, the chief executive at Nairobi Coffee Exchange, says projections indicate there will be a good crop on the global market and could impact local prices.

The international prices of the produce have in the past two months been subdued by an increase in volumes.

READ: Coffee prices rise marginally on demand for quality beans

Kenya sells more than 95 per cent of the locally produced coffee on the world market.

Kenya benchmarks its coffee prices on the trading New York exchange, which is the world’s largest auction for the produce.

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