Kenya’s top exports experienced varied outcomes in the first quarter of 2024, according to new data. The value of coffee exports decreased by 0.5 per cent to Sh7.60 billion from Sh7.64 billion in the previous year.
Despite this decline, the average price of Kenyan coffee rose by 11.5 per cent, climbing from Sh635 per kilogramme in the first quarter (Q1) of 2023 to Sh708 per kilogramme in the corresponding period of 2024.
In contrast, tea production saw a significant spike, with January and February 2024 yielding 58,966 tonnes and 55,447 tonnes, respectively, compared to 54,919 and 32,730 tonnes in January and February 2023.
The value of tea exports also surged by 33.7 per cent, rising from Sh43.2 billion in Q1 2023 to Sh57.8 billion in the same period of 2024.
Kenya’s tea auction prices per kilogramme rose to Sh349.5 in January 2024 and Sh339.5 in February 2024, up from Sh288.7 and Sh290.7 in the same months of 2023, thanks to favourable short rains.
Kenya Institute for Public Policy Research and Analysis (Kippra) quarterly market analysis of April to June 2024 noted that Kenya’s share of global coffee exports remained stable at 0.4 per cent in January and February 2024, before increasing to 0.6 per cent in March. This is compared to 0.4 per cent, 0.8 per cent, and 0.8 per cent in the same months the previous year.
The 2024 Coffee Annual Report by the Foreign Agricultural Services (FAS) had warned of a potential decline in the country’s coffee production by year-end.
Extension services
The dip in exports was largely attributed to the conversion of over 105,000 hectares of coffee farms into real estate, as farmers sought higher returns. Additionally, lower yields resulted from limited access to inputs and extension services for farmers.
According to the Kenya Coffee Platform report 2021, the increase in demand for affordable housing in the previous year saw coffee farmers sell their farms for real estates.
Coffee farmers and wealthy landowners have slowly been converting their lands to accommodate real estates as the look for better yields and higher returns from as far as 2011.
In 2020, powerful families in Kiambu County who made fortunes growing and exporting coffee opened up their farms for real estate development.
For instance, the Kenyatta family, which held thousands of acres of farms around Ruiru, converted part of the holding into a multi-billion shilling private municipality crafted in the style of Tatu city.
Kiambu, which is located on the western fringes of Nairobi, has the highest number of powerful families who have had tight control over vast tracks of land they acquired from British settlers at independence and whose value has appreciated more than a hundred times in five decades.
Globally, average coffee prices were higher in April-June 2024, averaging 217.3 US cents per pound, compared to 175.0 US cents per pound during the same period in 2023. This price increase was driven by growing demand and a projected global shortage of coffee.
The decline in coffee exports was also influenced by weather disruptions, including poor rainfall in major coffee-producing countries such as Vietnam and Brazil, which led to widespread crop losses and reduced harvests.
