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Kenyan producers hope rise in coffee prices will bring prosperity

By Agence France-Presse
Sunday, March 6, 2011 12:36 EDT
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NAIROBI (AFP) – Kenyan coffee producers are hoping that soaring global prices will end years of neglect, that saw output drop fourfold, and herald a new golden age for what was once the country’s top export.

The arabica that grows in the volcanic soils of Kenya’s highlands is sought worldwide as a high quality bean used in the blends that fill the cups of the ever-growing global army of espresso connoisseurs.

Yet production has dwindled steadily in recent years to hit 36,000 tonnes last year, down from 130,000 tonnes in 1997.

Coffee is the most traded commodity in the world after oil but Kenyan growers are also among the poorest and many of those who enjoyed the coffee heyday of the seventies have since uprooted their trees and diversified.

Most of Kenya’s remaining bushes are centennial and the farmers not much younger.

“The average age of a Kenyan farmer is about 55 years and I think I’m being conservative. So without somebody to carry the mantle… the sector is under threat,” said Lucy Kimani, head of the Kenya Coffee Producers’ Association.

At Nairobi’s coffee exchange, just under veteran President Mwai Kibaki’s portrait, hangs a ceramic sign for Mincing Lane — once a hub for tea and coffee trade in London — that was donated in 1951.

The pre-colonial auction room — with panelled walls, faded lime green seats and writing tables sporting large built-in tin ashtrays — reeks of long-gone glory days.

But lately, the numbers flashing in red on the digital trade screen have gone wild, with lots of Kenya’s benchmark AA grade fetching a record 1,022 dollars last month, more than double the highest prices achieved last year.

“Right now what’s trading in front of you is at six dollars a kilo,” said Jay Sondhi, one of the buyers in the auction room cranking the prices by keeping their finger down on their bidding button.

“Over the past weeks we’ve had coffee trading at 10 to 12 dollars a kilo… and that represents a 100 percent increase in some of the top qualities… That’s huge,” said the managing director of Sondhi Trading Limited.

Prices have reached 40-year highs because global demand — spurred notably by the spread of cafe culture to emerging powers such as India — keeps growing while stocks are at an historical low.

Top world producer Brazil is heading into the off year of its biennial crop cycle while bad climate in Colombia, the fourth producer behind Vietnam and Indonesia, has resulted in poor harvests for three consecutive years.

But John Logan, Kenya Coffee Initiative Director at Technoserve, a non-profit body that helps people in the developing world build businesses, warned that much more was needed to rejuvenate the industry than just high prices.

Kenya’s estimated 600,000 coffee farmers work through cooperatives but trust needs to be rebuilt after years of bad governance that drove small scale holders away from the crop.

“A coffee buyer will tell you that the best fertiliser for coffee is price, it’s true but it’s not only that… It’s how much the farmer really gets that counts,” said Logan.

While prices are expected to remain bullish for some time, prices will fall again.

The growers’ trust in their cooperatives needs to be rebuilt and production needs to increase, Logan said.

“The average coffee farmer in Kenya produces less than two kilos of cherries per tree when he could be producing 10 kilos” with the right inputs, he said. “Farmers will need higher yields, there’s no spare land.”

John Waweru has a small plot near Thika, an hour’s drive from Nairobi, and has been farming coffee all his life, just like his father before him.

“In latter years the coffee prices were very low but of late it has increased so it is now bringing in an income for us, helping us educate our children as well as maintaining our family,” he said.

He said younger farmers were being drawn back to old neglected bushes.

The cooperative he brings his coffee to has seen its membership increase significantly in recent weeks and Daniel Mbithi, the head of the Kenyan Coffee Producers and Traders Association, said he expects “more and more young people to go back to their farms.”

“I can’t be sure we’re going to see another heyday but there’s a lot of enthusiasm,” Mbithi said.

Coffee is considered a rich man’s drink in Kenya, where a lot of farmers could scarcely afford anything other than tea for their own consumption.

“If prices stay like this, I hope coffee farmers will become coffee drinkers,” said Waweru.

[by Jean-Marc Mojon]

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
 
 
 
 
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