Coffee export earnings drop

Regional performance

Kenya, Tanzania, Rwanda and Burundi in the east African region too recorded a sharp drop in coffee export earnings citing a decline in price at the international market.

Kenya recorded a 20.3% decline in coffee export earnings to US$102 million at the end of the 2018/2019.  The market report by the Nairobi Coffee Exchange (NCE) shows that earnings declined from Kshs12.8 billion in 2018 to Kshs10.8billion in the 2018/19 season.

The exchanges’ Chief Executive Officer, Daniel Mbithi, said the low earnings resulted from a consistent trend in New York, where Kenya trades nearly all of its beans.

“The earnings dropped on account of the dipping in prices at New York terminal, which touched a record low of 86 US cents per pound in 2019 compared with a high of 120 last year,” he said.

The government has unveiled plans of rejuvenating the sector after it recently announced a US$30 million financial package that is aimed at improving operations across 500 coffee milling factories.

In Tanzania, the Tanzania Coffee Board statistics shows that coffee exports fell from 1.13 million bags in 2017/18 season to 833,300 in 2018/2019 season. The country is now targeting to produce 1.6million bags of coffee in the next four years.

In Rwanda, coffee revenues decreased from US$69 million in 2017/2018 to US$68 million in 2018/2019 even as export volumes increased from 333, 300 bags to 350,000 bags during the period under review.

In Burundi, farmers harvested 300,000 bags of coffee last season. However, the country projected to harvest merely 200,000 bags following the outbreak of diseases.

Reports indicate that the Burundian farmers are now trying to boost output to 500,000 bags by 2023 under a $55 million World Bank-funded project.

2019/20 projections

Niyibigira told The Independent that the government is currently strengthening extension services at the local levels through farmer trainings using the newly developed coffee manuals.

He said the country hopes to export 5.17million 60kg bags worth US$527.3million in the 2019/20 season as the newly planted crops increase yields and prices start to increase at the international market.

Globally, ICO notes that coffee production in 2019/20 season is projected at 0.9% lower at 167.4 million bags with a 2.7% decline in Arabica output to 95.68 million bags, while Robusta production is expected to rise by 1.5% to 71.72 million bags.

South America’s production is expected to fall by 3.2% to 78.08 million bags, largely attributed to the decline in Brazil’s Arabica output in its off-year of the biennial crop cycle.

Production from Asia & Oceania is projected to grow by 1.9% to 49.58 million bags largely due to a recovery in Indonesia’s output while Vietnam is expected to remain stable.

Central America & Mexico could see an increase of 0.9% to 21.54 million bags while Africa’s output is estimated to decline by 0.6% to 18.2 million bags.

Meanwhile, coffee consumption is likely to slowdown in the 2019/20 season in line with the anticipated slower growth of the global economy.

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