Kenya Coffee Exports Seen +22.5% On Year At 43,000 Tons-Board

Kenya's coffee exports for 2010-11 crop year (October-September) will rise 22.5% to 43,000 metric tons, from 35,108 tons the previous year, the Coffee Board of Kenya said Wednesday.

The export earnings will increase by 11.8% to 18 billion Kenyan shillings ($209 million) from KES16.1 billion ($187 million), the board said in its recent report emailed to Dow Jones Newswires.

"The industry contributed about 8% of the country's foreign exchange earnings, a drop from a 40% contribution in the 1980s," the report said.

The acreage under coffee has been in decline, largely due to the number of growers who have shifted to other competing and more lucrative enterprises.

"These include dairy and real estate especially in peri-urban areas of Nyeri, Kiambu, Thika," the report said.

However, it noted a change in the trend.

"There is renewed interest in coffee farming due to the prevailing market prices," the report said. "Average payment to growers in the entire coffee growing region during 2009-2010 coffee year were generally very impressive. This encouraged growers to go back to farming and it is expected that production will improve next coffee year, if the weather remains favorable."

The production declined from an all-time high of 130,000 tons in 1987-1988, to a record low in 2009-10 of 42,000 tons due to an unexpected change in the weather which caused a high incidence of coffee leaf rust that drastically cut the crop, the report said.

However, in 2010-11, production is expected to increase to an estimated 50,000 tons based on two crop forecasts, conducted in November and April, which revealed that there will be no significant difference from the estimated forecast of around 51,000 tons, the report said.

Production in 2010-11 is expected to be boosted by favorable weather and high global coffee prices.

Last week, Joseph Kimemia, the director of the Coffee Research Foundation said production may reach even up to 60,000 tons in 2010-11.

Kenya exports nearly 98% of its coffee output mainly to the European Union, U.S. and Middle East.

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