Kenya's 2012/13 coffee earnings, output expected to inch lower

NAIROBI (Reuters) - Kenya expects its coffee export earnings to dip marginally in the 2012/13 (Oct-Sept) season due to poor international prices and lower volumes, the industry regulator said on Monday.

Although the east African nation is a small coffee producer compared with other producers globally such as Brazil and Vietnam, its speciality beans are much sought after for blending with those from other producing countries.

Loise Njeru, managing director of the Coffee Board of Kenya, said both earnings and production volumes are expected to dip marginally in the current 2012/13 crop season partly due to the low global prices that have affected the morale of growers and competition for land from other ventures such as real estate.

"The expected fall is also pegged to the cyclical nature in the coffee production pattern," she told Reuters.

Coffee exports were at one time Kenya's leading foreign exchange earner, but poor management in the sector reduced output from a record 130,000 tonnes in 1987/88. Many small-scale coffee farmers disillusioned by poor earnings turned to other crops or sold land for real estate.

Njeru said the preliminary projections showed that 46,000 tonnes would be harvested in the 2012/13 crop season compared to the previous period's 49,003 tonnes, while export earnings for the season could dip to 18 billion Kenyan shillingsfrom 19 billion.

"However, this estimation will be reviewed as the year progresses to take into account weather changes and agronomic practices at the farm level," Njeru said.

Statistics by regulator showed the east Africa nation's total coffee export earnings dropped 13.63 percent in the 2011/12 crop season from 22 billion in the previous period despite a rise in production volumes.

"This was basically attributed to a dip in coffee prices in the international market hence affecting the performance at the Nairobi Coffee Exchange (NCE)," Njeru said.

Kenya exports about 90 percent of its coffee through the NCE while the remainder is directly sold by growers to foreign buyers.

The official said the volume of coffee produced in the 2011/12 season increased to 49,003 tonnes from 36,629 tonnes the previous season.

"The increase is attributed to favourable weather in almost all the coffee growing areas, good prices experienced in the year 2010/2011 that encouraged growers and rehabilitation of coffee farms by growers," she said.

Source: http://news.yahoo.com/kenyas-2012-13-coffee-earnings-output-expected-inch-111023223--finance.html

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