Coffee production in Kenya set to drop 10% due to fertilizer crisis

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Coffee production in Kenya set to drop 10% due to fertilizer crisis


A farmer takes care of her coffee trees in Nyeri. PICTURES | JOSEPH KANYI | NMG

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Summary

  • The spike in global fertilizer prices began in early 2021 due to the impact of the Covid-19 pandemic.
  • Currently, fertilizer prices in Kenya stand at 6,000 shillings per 50-kilogram bag, an increase of 71% from the previous year.
  • Data from the Kenya National Bureau of Statistics (KNBS) shows that Kenya exported coffee worth 26.1 billion shillings in 2021, up from 22.2 billion shillings in 2020.

Kenya’s coffee production in the 2022-23 season is expected to fall by 10% to 700,000 bags due to higher fertilizer prices, the United States Department of Agriculture (USDA) says in a recently released report which tracks coffee production in the country.

The spike in global fertilizer prices began in early 2021 due to the impact of the Covid-19 pandemic. The ongoing war between Russia and Ukraine has aggravated the situation.

Currently, fertilizer prices in Kenya stand at 6,000 shillings per 50-kilogram bag, an increase of 71% from the previous year.

The price hike is also due to producing countries such as China, Russia and Turkey restricting exports to protect their farmers, compounded by strong consumer demand from India, Brazil and the United States. who buy large quantities, thereby reducing the available global supply.

“Kenya’s coffee production in 2022/23 is expected to decline by 10% to 700,000 bags due to lower yields caused by reduced fertilizer application,” the US government said.

“Planted area of ​​the 2022/23 crop is expected to remain stable at 105,000 hectares as new plantings are curtailed by a shortage of coffee beans.”

The US agency says coffee exports from Kenya in the 2022/23 season will consequently decrease to 670,000 bags from 750,000 bags due to lower production.

Data from the Kenya National Bureau of Statistics (KNBS) shows that Kenya exported coffee worth 26.1 billion shillings in 2021, up from 22.2 billion shillings in 2020.

Kenya is the fifth largest coffee producer in Africa after Ethiopia, Uganda, Ivory Coast and Tanzania, according to the International Coffee Organization.

According to the USDA, domestic coffee consumption over the period is however expected to increase slightly, although demand growth driven by the recovery of the hotel sector is dampened by the decline in consumer purchasing power due to the high inflation.

“While consumption is expected to increase as Kenya’s tourism and catering sectors recover following the removal of Covid-19 related restrictions, domestic consumption growth will be constrained by high inflation, which reduces the power consumers’ buying habits,” the USDA report said.

“Coffee consumption is considered a non-essential expense, which makes it sensitive to changes in purchasing power.”

The Kenyan government has announced a 5.7 billion shilling fertilizer subsidy to partially offset fertilizer prices.

More than 80 percent of Kenya’s coffee is marketed by cooperatives, while the rest is sold by companies and individual businesses.

Over 90 percent of coffee in Kenya is sold through the Nairobi Coffee Exchange (NCE). The rest is sold through “direct sales”, which are contracts negotiated between marketing agents on behalf of producers and exporters.

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