Kenya's Annual Coffee Production: Signs of Ongoing Decline in the Country's Coffee Industry

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Kenya's Coffee Production Decline Amidst Economic Challenges

In recent years, due to low returns and poor management, Kenya's coffee production has been declining year by year, showing a downward trend in the coffee industry.

According to the latest data from the Kenya National Bureau of Statistics, Kenya's coffee exports decreased from 2,639 metric tons in January 2020 to 2,129 metric tons in January 2021, a sharp decline of 19%.

Due to economic weakness in Kenya, the local currency's exchange rate against the US dollar has declined (with the highest USD to Kenya shilling exchange rate in January 2021 being: 1 USD = 110.40 Kenya shillings). This has caused Kenya's export revenue to rise from 985 million shillings to 1.3 billion shillings, an increase of 36%.

In the late 1980s, Kenya's annual coffee production could reach a peak of 130,000 tons, but now it produces only about 40,000 tons annually. The potential annual yield per coffee tree is 35 kilograms, while most smallholder coffee farmers produce less than 2 kilograms per tree annually. Currently, Kenya's coffee production accounts for nearly 1% of global production, but the country's coffee output has shown a declining trend in recent years.

According to data from the United States Department of Agriculture, Kenya's coffee exports in 2020 were 600,000 bags (60 kilograms per bag), lower than the previous season's 815,000 bags.

Kenya's coffee market share in places like the United States and South Korea has also been declining. In 2019, US consumption of Kenyan coffee decreased from 13.28% in 2018 to 11.78%. Although South Korea's market share in Kenyan coffee exports increased from 6.43% in 2017 to 9.44% in 2018, it declined again to 6.51% in 2019.

Kenya Launches Coffee Revitalization Initiative

Recently, Kenyan authorities have launched a 1.5 billion shilling coffee revitalization program aimed at increasing coffee production and quality, protecting farmers from exploitation, and saving the country's declining coffee industry.

This project is Kenya's new attempt to revitalize the industry, funded by the World Bank. This project complements the government's previously launched 3 billion shilling Cherry Revolving Fund. The fund aims to provide affordable, sustainable, and accessible loans to smallholder coffee farmers.

Additionally, Kenyan President Uhuru Kenyatta has extended the term of the country's coffee sector executive committee so that the committee can oversee the findings of the reform task force.

The task force also recommended changes to the coffee crop management framework, promotion of specialty coffee, increased youth participation, and transforming the Nairobi Coffee Exchange into a publicly listed company.

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