Kenya’s economy generates $62 billion yearly from various industries, one of which being agriculture. Over 25% of that figure comes from the agricultural sector alone. The horticultural sub-sector represents the bulk of the one-quarter of total revenue that farming brings to the economy. With over 600,000 smallholder farmers, tea is one of the mainstays of foreign exchange in Kenya. Coffee, on the other hand, which covers 160,000 hectares of cultivated fields sees 75.5% of the produce come from family growers under co-operative societies.
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With these figures in mind, the following is an array of statistical factors that make the two crops tick in the export trade:
According to the latest statistics, the price of coffee from Kenya has continued to rise even when other agricultural produce flails. By January, 2018, farmers could rake in 30% more money from each kilo than they did three months earlier. By the end of 2017, revenue from the sector buoyed by small-scale farmers rose by 69%.
With demand increasing worldwide, coffee in the Nairobi Auction House has also attracted admirable prices for co-operatives. March, 2018 saw the highest bid for a 50-kilo coffee bean sack that retailed for KSH51,600 ($511). This represented a significant earning for AA grade farmers whose average is around KSH23,000 ($228) during the best offers in normal sales.
On the price department, tea is also a trailblazer for farmers’ and exporters’ earnings. The country, being the world’s leader in black tea shipments, made KSH 125b ($1.21b) three years ago. In January, 2018, the main auction house at Mombasa saw the price for each kilo of tea go up by 10% to $2.85. Though lower than coffee, the value has added stamina to family growers and SME cooperatives that export the commodity.
With about eight months of harvest duration intermittently, tea is a valuable sale for farmers on the West Rift and Central parts of Kenya. It has two main seasons. These include May through August and then late in the year, with the latter being the main season.
Coffee, on the other hand, is available once per year in most parts of the country with above 1000 millimeters of rainfall, annually. In 2016, the annual sale was over 700,000 bags of 50 kilos each. With 70% of this emanating from family growers and/or cooperatives, there is no monopoly that large plantations create and thus coffee is readily available.
High Global Rankings
The Kenya Arabica variety is the number one in Africa in shipping sizes rivaling that of Ethiopia. It is not just the commodity that ranks well for even cooperatives are on the list. In 2017, three AA grade producing plants and farmer cooperatives took the first 30 positions in quality rankings in the world. One of these from Kirinyaga on the foothills of Mount Kenya took the fourth place overall with its AA Grade, which is the second grade of coffee after ‘A’ or ‘Elephants’ variety. Another cooperative from Muran’ga near Nairobi took the twentieth position with its third grade or ‘AB’ beans while yet another Kiringaya-based plant took the twenty-fifth position with its graded coffee. Though this signified a depreciation from the seven factories that were represented in 2016, having a top-5 finish in 2017 was significant.
Tea, on the other hand, is a global favorite especially the black variety. The country mainly exports the curl, twist and curl (CTC) blend that represents 90% of the factory output. Green tea has also ranked well along its peers from Ceylon and India. The United States and the whole of British Isles import blended tea from the CTC plants in Kenya to sample different aromas and quality margins. However, the US now also imports unblended varieties from Kenya.
Therefore, if you are about to venture into the Kenya tea or coffee trade, it is noteworthy that it cuts across all aspects of the value chain. While farmers benefit from high prices, importers gain from perennial high quality supplies. Though Kenya has recently introduced regulation on auctioning houses to generate more revenue and reduce unchecked exports, the sector remains vibrant for all.