Market News

Alarm over bill barring raw coffee export


Coffee beans on display for auction at the Nairobi Coffee Exchange. FILE PHOTO | NMG

A bill seeking to bar export of raw coffee has caused jitters, with some international buyers avoiding to sign further contracts with local suppliers for fear they might not get the produce.

An official at the Nairobi Coffee Exchange says some of the overseas buyers were shying away from new agreements for clean coffee because of uncertainties over the fate of the Crops Amendment Bill by Gatundu South MP Moses Kuria.

The Bill proposes that all coffee grown in Kenya undergo processing, production and packaging locally.

“Buyers are refusing to sign orders for clean (American green) coffee as they do not know what will happen in the future, with fears that they are likely to lose out on their orders,” said an official at NCE who sought anonymity so as to speak freely.

The proposed amendment to the Crops Act says the product may only be distributed, marketed or exported in its fully processed form.

If it sails through, it will lock out international buyers and large global coffee shops like Starbucks that buy a lot of semi-processed beans.

Made in Kenya

Kenya has some of the best coffees in the world bought by traders and coffee shops for blending to get certain flavours.

Stakeholders have argued that the country loses out on originality as its brand cannot be identified in the world market given that it is used to blend others.

The legislator seeks to amend the law so that all packages processed for export be clearly and conspicuously labelled “Made in Kenya.”

The country sells over 95 percent of its coffee to the world market as local demand has remained low over the years despite campaigns to raise consumption.

Over 80 percent of the coffee produced locally is sold through the auction, with just 10 shipped out directly to the world market.

A coffee task force formed by President Uhuru Kenyatta in 2016 has proposed that the direct coffee sales be increased to enable farmers earn more from their crop.

Kirinyaga County is set to open the first ever coffee shop in New York and commence selling Kenyan coffee directly to America.