The Kenya coffee industry benefits from the fact that they have two harvests for year. The first crop, called the “fly crop,” is harvested between September and December each year. Then the second crop, or the “main crop,” is harvested at some point between March and July.
Coffee is a major cash crop for the country. There are over 700,000 farmers operating in this space, providing direct and indirect economic benefits for about 5 million people. About 10 billion shillings per year is added to the national GDP from the industry.
Most of the coffee that is grown in Kenya is headed toward the export market. Only 3% of the total domestic population of the country purchases locally grown coffee on a regular basis. To help growers maximize their profits, the government of Kenya allows farmers to sell their coffee directly to international buyers.
Farmers are also permitted to sell on contract their coffee through the Nairobi Coffee Exchange, which is a spot market that has been in operations since the 1930s. Any direct sale contacts, however, must be registered with the Agriculture and Food Authority in Kenya.
Important Kenya Coffee Industry Statistics
#1. There are currently 176 million bearing trees producing coffee for farmers in Kenya. These trees cover a total of 112,000 hectares in the country. Another 2 million non-bearing trees are also part of the industry. (U.S. Department of Agriculture)
#2. Arabica beans are the primary coffee source that is reported by the Kenya coffee industry. About 750,000 60kg bags of coffee are produced by farmers in the country each year. (U.S. Department of Agriculture)
#3. Kenya does import some coffee products each year as well. In 2015, the imports totaled 20,000 bags of soluble products. (U.S. Department of Agriculture)
#4. Germany is the leading export destination for the Kenya coffee industry. In 2016, 17% of the industry’s total crop went to the country, or about 7,500 tons. The United States holds a 14% of the Kenyan coffee market, followed by Belgium (11%), Sweden (10%), and Finland (6%). (U.S. Department of Agriculture)
#5. In total, about 40,000 metric tons of coffee products are produced by the industry each year. Measures are in place to increase production levels up to 48,000 metric tons. In 1987, the industry produced 129,000 metric tons of coffee. (Xinhua)
#6. Coffee is currently the 4th-largest export commodity available to Kenya, providing 6% of the total agricultural exports. (U.N. Food and Agriculture Organization [FAO])
#7. Coffee cooperatives provide 75% of the area planted with trees for the Kenya coffee industry, but account for just 54% of the harvest that is produced. In terms of yield, cooperatives have a 28% share of the industry. (FAO)
#8. The Kenya coffee industry features a dual production system, with about 3,300 large-scale producers supplementing the almost 700,000 small producers. (FAO)
#9. Agents who work with coffee growers in Kenya are required to pay a 4% levy on any sales contract, in addition to fees on permits and certificates. 50% of the levy goes to the Coffee Research Foundation, with the remainder split between the local coffee board and community governments. (FAO)
#10. In 1986, Kenya held a 3.1% global share of the coffee market. In 2006, the global share held by the Kenya coffee industry was just 0.6%. (Standard Digital)
#11. About 2.25 billion cups of coffee are consumed around the world each day. The Arabica coffee from Kenya is considered some of the best available, which is why 93% of the product is exported each year. (Forbes)
#12. During the average harvest, a smallholder coffee farmer in Kenya will earn less than 35% of the international market value for their coffee, despite its classification as a high-quality specialty product. (Forbes)
#13. In the Nairobi Coffee Exchange, Ibero Ltd. purchased the most coffee from the industry, accounting for 16.5% of all coffee sold. The total value of their purchases was $28.6 million. Taylor Winch Ltd. purchases 16.2% of the available coffee, followed by C. Dorman Ltd. (11.1%), Kenyacof Ltd. (9.8%), and Engelhart Commodities (7.3%). (Kenya Coffee Traders Association)
#14. There has been a push to grow more Ruiru 11 coffee trees in Kenya because it offers a better planting density. Traditional coffee varieties require about 1,300 trees per hectare. With Ruiru 11, farmers can achieve up to 3,300 trees per hectare. (Kenya Coffee Traders Association)
#15. The Kenya coffee industry is targeting the U.S. market, as coffee consumption in the States is growing at 6% in revenue and 4% in volume. (Kenya Coffee Traders Association)
#16. The estimated average price for a bag of coffee produced by the industry is around $200. (Kenya Coffee Traders Association)
Kenya Coffee Industry Trends and Analysis
The Kenya coffee industry has seen three decades of decline hurt its global opportunities. German exports have gone from 22% of the market revenues generated to just 17% over the past 5 years. Total outputs have been cut by two-thirds. Even after all this, however, the economic drive of the industry continues to make it a leading cash crop for the country.
Recovery efforts are in place to improve production levels. Added foreign direct investment will encourage the industry to grow as well. Plans are also in place for tree irrigation in the western part of the country, which may reduce expenditures for farmers by up to 30%.
Until there is an improvement in coffee facilities and stability brought into the market, low returns are the most likely outcome for this industry. Pests, climate change, and disease are major threats to the industry. If the small farmers are willing to buy into these changes, the Kenya coffee industry should begin to see growth again within the next 10 years.
If not, it will likely continue its slide toward unimportance.