Experts have warned of a likely decline in coffee production in Kenya to an estimated 750,000 bags by the end of the year.
The forecast is contained in the 2024 Coffee Annual Report by the Foreign Agricultural Service (FAS) in conjunction with the Global Agricultural Information Network.
FAS, a global organisation that does market analysis on agricultural commodities attributed the decline to stagnation in harvested area in the country.
Harvested areas, currently covering 105,000 hectares, are declining as some farmers convert coffee farms into real estate hoping for better earnings.
This trend has mainly been recorded in the peri-urban areas like Kiambu.
In addition, establishment of new coffee farms has been hampered by the perennial shortage of certified planting materials due to funding constraints by Coffee Research Institute.
Furthermore, experts say production will also be impacted by lower yields due to limited access to inputs and extension support to farmers.
In July 2023, the state implemented regulations that abolished marketing agents, and prohibited businesses from holding multiple licenses throughout the value chain.
The reforms terminated inputs, extension and certification support programs that were previously provided by the de-licensed marketing agents.
In addition, all payments for coffee sold through the Nairobi Coffee Exchange (NCE) must be processed through the recently established Direct Settlement System (DSS) platform.
Sources indicate inordinate payment delays as the DSS, which is managed by the Cooperative Bank of Kenya, gets fully operational.
Notably, several large millers have ceased operations due to the new licensing requirement where farmers are to mill their coffee at specified mills.
The milling will either be with the New Kenya Planters’ Cooperative Union (NKPCU) or at county-based mills that are owned and operated by Cooperatives.
Unprecedented milling delays due to congestion at some of the mills have so far been witnessed.
According to the 2024 Economic Survey, coffee production decreased by 6.2 per cent from 51.9 thousand tonnes to 48.7 thousand tonnes in 2023.
This in turn saw a decline in unit prices of coffee from Sh768.7 per kilogram in 2022 to Sh708.4 per kilogram.
The decline was largely attributed to the coffee berry disease, which thrives in overly wet conditions.
However, industry sources indicate that the heavy rains in April-May 2024 are unlikely to have significant impact on production.
This is because the early crop had matured by April, and therefore escaped damage by Coffee Berry Disease.
The report also predicted a decrease in Kenya’s 2024 coffee exports to 720,000 bags from 750,000 bags in 2023 due to lower domestic supply.
In 2023, United States retained its position as the lead export destination for Kenyan coffee.
Other key destinations included Germany, Sweden, South Korea, and Belgium.