Kenya’s Arabica exports will likely increase by six percent for Marketing Year (MY) 2012 (October 2011 to September 2012) from the previous MY due to better crop husbandry practices, government support initiatives, and anticipated good weather.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number:
Kenya Coffee Annual Report
Souleymane Diaby and Carol N. Kamau
Kenya?s Arabica exports will likely increase by six percent for Marketing Year (MY) 2012 (October
2011 to September 2012) from the previous MY due to better crop husbandry practices, government
support initiatives, and anticipated good weather. With the launch of Batian, a new coffee variety,
Kenyan coffee growers may boost exports in coming years.
Commodities: Coffee, Green
Reportedly, Kenyan coffee growers, mostly smallholders, produce 2.5 kg per tree against a potential of
20 kg. In addition, coffee-growing land near urban centers has declined due to conversion to real estate
and switch to more profitable crops such as dairy and horticultural farming. However, new plantations
are opening up in the western region of the country.
In September 2010, the Government of Kenya (GOK) launched a new coffee variety, Batian, to improve
production and assist a nascent recovery in the coffee sector. Batian, which is resistant to both berry
disease and leaf rust, could reduce production costs by 30 percent, yield five tons per hectare, and
mature in two years. Moreover, it requires less spacing than the traditional varieties, hence more trees
per unit area of land.
Kenyan coffee production has declined every year since 2001 as shown the graph below. However,
FAS/Nairobi forecasts slightly higher production for MY 2012 than in MY 2011. Record coffee prices,
better crop husbandry practices, government support programs, and anticipated favorable weather are
likely important factors contributing to the increase in production.
For the MY 2011 crop, the GOK increased its Coffee Development Fund (CDF) by 20 percent to $15
million to boost coffee production and revive the sector. Now smallholder coffee farmers have access to
loans to buy fertilizer, fungicides, and other farm inputs. In addition, the GOK will provide $50 million
in debt relief to cooperative societies.
Data Sources: 1961- 2009: USDA; and 2010-2012: FAS Nairobi
Area planted and harvested, bearing and non-bearing trees are estimates.
Coffee, Green Kenya 2009/2010 2010/2011 2011/2012
Market Year Begin: Market Year Begin: Market Year Begin:
Oct 2009 Oct 2010 Oct 2011
USDA Official New Post USDA Official New Post USDA Official New Post
Area Planted 0 143 0 143 150
Area Harvested 0 138 0 138 138
Bearing Trees 0 200 0 200 200
Non-Bearing Trees 0 0 0 5 10
Total Tree Population 0 200 0 205 210
Beginning Stocks 124 124 84 40 15
Arabica Production 750 665 950 748 830
Robusta Production 0 2 0 2 2
Other Production 0 0 0 0 0
Total Production 750 667 950 750 832
Bean Imports 0 1 0 0 0
Roast & Ground Imports 0 0 0 0 0
Soluble Imports 0 18 0 0 0
Total Imports 0 19 0 0 0
Total Supply 874 810 1,034 790 847
Bean Exports 740 742 950 750 800
Rst-Grnd Exp. 0 1 0 0 0
Soluble Exports 0 3 0 0 0
Total Exports 740 746 950 750 800
Rst,Ground Dom. Consum 50 20 50 25 30
Soluble Dom. Cons. 0 4 0 0 0
Domestic Use 50 24 50 25 30
Ending Stocks 84 40 34 15 17
Total Distribution 874 810 1,034 790 847
1000 HA, MILLION TREES, 1000 60 KG BAGS
Data sources: Coffee Board of Kenya: Production 2009/2010
Global Trade Atlas (GTA): All imports and exports data
FAS/Nairobi: All remaining lines and years
The table below graphically shows the Kenya coffee calendar (September/October).
Kenyans generally prefer tea to coffee. The Coffee Board of Kenya (CBK) estimates domestic
consumption at only three percent. Most Kenyans perceive coffee as an export crop and cannot afford
to buy it at retail level.
However, the growing number of coffee retail chains in Kenya?s urban centers indicates that domestic
consumption is gaining momentum. For example, in Nairobi, six coffee houses (Java, Dorman?s, Art
Café, The Mug, Savannah Coffee Lounges, and Coffee World) opened a total of 28 new coffee shops in
the last two years.
The coffee industry in Kenya, while small by global standards, remains an important player due to its
high-quality beans. Europe is the largest market for Kenya?s exportable coffee surplus. Kenyan
exporters usually ship their products between March and July with May/June being the heaviest.
The Nairobi Coffee Exchange (auction system) handles 85 percent of the country?s exports while the
rest is shipped through direct sales. For the current marketing year, the auction closed three months
earlier (on April 19 to resume on June 7) than the traditional July-August window due to low volume of
offerings. In general, marketing agents must offer at least 10,000 metric tons of green coffee beans for
the auction to take place.
According to the CBK, prices for Kenyan coffee beans are at 34-year highs. In March 2011, the
premium grade reached $600 per 50 kg bag at the auction. Reportedly, Kenyan coffee export earnings
are forecast to increase by 5-10 percent during the current marketing year.
Export Trade Matrix
Commodity Coffee, Green
Time Period 2008/2009 Units 2009/2010
Exports For 2009 Tons 2010
United States 7,799 5,335
Germany 13,255 Germany 10,230
Switzerland 1,124 Switzerland 564
Sweden 8,644 Sweden 5,391
Netherlands 1,410 Netherlands 865
United Kingdom 2,587 United Kingdom 2,855
Finland 5,214 Finland 3,834
Belgium 7,122 Belgium 6,212
Canada 1,532 Canada 1,213
Norway 1,355 Norway 1,287
Saudi Arabia 1,548 Saudi Arabia 1,285
Data Source: Global Trade Atlas (GTA)
Data Sources: 1961-2009: USDA; and 2010-2012: FAS Nairobi
Kenyan coffee traders and growers hold majority of the stocks. Some stocks are also held in the coffee
The GOK does not facilitate or support coffee export subsidies and does not charge export taxes.