Kenya's coffee trade falling 'near to irrelevance'

Decades of underinvestment, compounded by successive years of poor weather, are reducing Kenya's once-mighty coffee industry to an irrelevance in world trade.

Kenya's coffee exports, which topped 2m bags in 1990, are on track to fall to less than one-third of that figure in 2010-11, a report from the US Department of Agriculture's Nairobi bureau said.
The decline to shipments to their lowest levels since the 1960s, when the industry was building up to its 1980s' heyday, reflects in part setbacks to yields caused by drought last year and heavy rains this year.
"February rainfall totals in coffee growing areas reached 200% of normal," the briefing said.

'Century-old bushes'

However, a dearth of investment, in both plantations and Kenya's transport infrastructure, have also taken a toll.

Kenya coffee forecasts, 2010-11 (year-on-year change)
Area harvested: 138,000 hectares (unch)
Arabica production: 668,000 bags (-8.2%)
Robusta production: 2,000 bags (unch)
Exports: 650,000 bags (-9.7%)
Domestic use: 25,000 bags (+4.2%)
Year-end stocks: 438,000 bags (-0.2%)
Source: USDA attache report 

"Reportedly, Kenyan farmers haven't been replacing coffee bushes, and as a result about 90% of the Kenyan coffee bushes are more than 100 years old," the bureau said.
"Coffee bush productivity, therefore, will likely continue to decline until growers reinvest in higher yielding coffee bushes."
Even higher world coffee prices - and a willingness by consumers in many countries, such as Spain, to pay more for Kenya's best arabica beans even than Brazil's or Colombia's - have proved insufficient to encourage investment.
"The premium doesn't appear sufficient to stimulate increased exportable surpluses in Kenya," the report said, noting a march of housing developments onto plantation land.
"While world coffee trade continues to increase, Kenyan exports continue their slide to a point of 'no longer relevant'."
Output decline 
Even Kenyan consumers are wary of the drink, preferring tea, of which the country remains a leading force.
"And with good reason when you consider that the coffee use at home and at many of the hotels and restaurants tends to be 'instant', and heavily diluted with water and milk," the report said.
The bureau estimated Kenya's coffee production falling 8.2% to 670,000 bags in 2010-11, the lowest for more than 30 years.