HK - Uganda coffee really kicking a.rse while ours is dead as dodo

[RV Pundit]

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http://www.theeastafrican.co.ke/oped/comment/Kenya-Uganda-coffee-industry/434750-3969924-r3nnuwz/index.html

They produce/export more than 300,000 tonnes while we are doing 50,000 tonnes. But we beat them hands down on quality.

[hk]

http://www.theeastafrican.co.ke/oped/comment/Kenya-Uganda-coffee-industry/434750-3969924-r3nnuwz/index.html

They produce/export more than 300,000 tonnes while we are doing 50,000 tonnes. But we beat them hands down on quality.

The problem with kenya coffee is simple lack of full liberalization as the writer points out. The cooperatives are the problem in kenya coffee industry. The sad thing in kenya is the poor who depends on cooperatives are the ones being fleeced. A farmer with at least 5 acres with a pulping factory are laughing all the way to the bank because they can sell directly to international buyers. This year we sold coffee at $9 per kilo which is really good. Now that agriculture is devolved the coffee act isn't applicable. So today a farmer doesn't need a license from coffee board to setup a pulping factor. As such new business models will come up where mobile pulping factory will come up and farmers to be paid cash on delivery. This will lead to increased production. And the beautiful thing is kenya especially mt. kenya produces some of the best quality coffee in the world. We'll hopefully become more like wine producers than just commodity producers. Kenya produces Arabica while uganda robusta which is of lower quality. The likes of the late Gov. Gachagua and silly  Gov. ndathi lost because of trying to control coffee industry instead of liberalizing. The coming yrs look very promising especially for people exploring roasting and blending to sell coffee via ecommerce in china for example. The opportunity to create coffee affiliated industry is very enticing, I am in it. I don't know what was the use of coffee task force that uhuru came up with since agriculture is devolved. Coffee farmers needs full liberalization only and production will increase just like what happened to milk industry and horticulture.

[RV Pundit]

9dollars is amazing. Thanks for the insight. Sound like business I can do.Only 5 acres. Indeed Coffee can go back to being the leading forex earner if gov stays out of the way.

The problem with kenya coffee is simple lack of full liberalization as the writer points out. The cooperatives are the problem in kenya coffee industry. The sad thing in kenya is the poor who depends on cooperatives are the ones being fleeced. A farmer with at least 5 acres with a pulping factory are laughing all the way to the bank because they can sell directly to international buyers. This year we sold coffee at $9 per kilo which is really good. Now that agriculture is devolved the coffee act isn't applicable. So today a farmer doesn't need a license from coffee board to setup a pulping factor. As such new business models will come up where mobile pulping factory will come up and farmers to be paid cash on delivery. This will lead to increased production. And the beautiful thing is kenya especially mt. kenya produces some of the best quality coffee in the world. We'll hopefully become more like wine producers than just commodity producers. Kenya produces Arabica while uganda robusta which is of lower quality. The likes of the late Gov. Gachagua and silly  Gov. ndathi lost because of trying to control coffee industry instead of liberalizing. The coming yrs look very promising especially for people exploring roasting and blending to sell coffee via ecommerce in china for example. The opportunity to create coffee affiliated industry is very enticing, I am in it. I don't know what was the use of coffee task force that uhuru came up with since agriculture is devolved. Coffee farmers needs full liberalization only and production will increase just like what happened to milk industry and horticulture.

[hk]

9dollars is amazing. Thanks for the insight. Sound like business I can do.Only 5 acres. Indeed Coffee can go back to being the leading forex earner if gov stays out of the way.

There are other auxiliary businesses that one can do, how about coffee tourism. Where people visit to taste, buy and see how coffee is grown and processed, just like wine houses. This can be part of Mt.kenya tourism circuit. I am looking into this I hope they tarmac the road which is near our farm soon. But I'll proceed irregardless.

[gout]

The coffee regulation is still under the control of multinationals and their proxies in our government. This is ridiculous and insane. Imagine a maasai being required a licence to roast his meat. The only way is go Uganda or Ethiopian way.

    Application for pulping station-licence
    Application for milling-licence
    Application for a warehouseman licence
    Application for a marketing licence
    Application for a dealers licence
    Warehouseman certificate application form
    Grower marketer application form
    Application for registration of management agent
    Application for registration of a coffee nursery

http://coffee.agricultureauthority.go.ke/forms/

Away from the government, the factory managers and private millers have fuelled a deadly coffee theft cartel which you don't wish to cross.

[Omollo]

So HK, if you got USD 9 per kilo, was it not enough to help pay down your private debts? Why did you need the state to repay your debts? I mean you speak for Kikuyus - by your own statement.

How much profit is that when you factor in the billions used to pay private debts? In fact how much of the USD 9/ kilo remains?

[MOON Ki]

This year we sold coffee at $9 per kilo which is really good.

I was startled by this figure.   I'm not saying it is wrong, but may I ask for the source.   

If you go here, you will find the KNBS Economic Survey 2017:  https://www.knbs.or.ke/  On page 130, the figure given for coffee is Sh. 472 per kilo; that's about $4.6 per kilo.   That's for the year 2016.

And here is general world data (for Arabica) up to the end of May:   https://ycharts.com/indicators/world_coffee_arabica_price

The KNBS figure of $4.6 is consistent with the world figures for almost all of 2016 (world average for 2016 is about $4.3).   Since then, i.e. 2017,  the world average has gone down.   But Kenya's figure has gone up to well over twice the world average?

Is Kenya really suddenly managing to sell its coffee at well over twice the world average? Where is that happening and who's buying?

The Nairobi Coffee Exchange in April:

The average price dipped to $214.51 per 50-kg bag from $232.4 in the previous year.

http://nairobicoffeeexchange.co.ke/index.php?option=com_content&view=category&layout=blog&id=10&Itemid=135

That's about $4.3 per kilo.

[RV Pundit]

Here we go with hair splitting. HK track record here is well known. If he says some guys managed to sell it for 9 dollars believe it. Kenya coffee is specialty - probably highest quality coffee out there - and just because the national average is 4 dollars...doesn't mean some people didn't sell for 9 dollars...or less than a dollar like most farmers selling crap coffee get.

This year we sold coffee at $9 per kilo which is really good.

I was startled by this figure.   I'm not saying it is wrong, but may I ask for the source.   

If you go here, you will find the KNBS Economic Survey 2017:  https://www.knbs.or.ke/  On page 130, the figure given for coffee is Sh. 472 per kilo; that's about $4.6 per kilo.   That's for the year 2016.

And here is general world data (for Arabica) up to the end of May:   https://ycharts.com/indicators/world_coffee_arabica_price

The KNBS figure of $4.6 is consistent with the world figures for almost all of 2016 (world average for 2016 is about $4.3).   Since then, i.e. 2017,  the world average has gone down.   But Kenya's figure has gone up to well over twice the world average?

Is Kenya really suddenly managing to sell its coffee at well over twice the world average? Where is that happening and who's buying?

The Nairobi Coffee Exchange in April:

The average price dipped to $214.51 per 50-kg bag from $232.4 in the previous year.

http://nairobicoffeeexchange.co.ke/index.php?option=com_content&view=category&layout=blog&id=10&Itemid=135

That's about $4.3 per kilo.

[hk]

So HK, if you got USD 9 per kilo, was it not enough to help pay down your private debts? Why did you need the state to repay your debts? I mean you speak for Kikuyus - by your own statement.

How much profit is that when you factor in the billions used to pay private debts? In fact how much of the USD 9/ kilo remains?

What private debt? I am private coffee farmer who isn't affiliated with a cooperative. Cooperative may owe debt to cooperative banks or CBK that they ill advised guaranteed and now can't collect.

[gout]

HK should come clear on the $9 per kilo. Is it cherry, parchment, green beans, roasted beans, a kilo of what?

On average 6 kilos of cherry convert to a kilo of parchment. Parchment is what is largely traded in the coffee market globally for quality purposes.   

Kenyan farmers even when getting a Kshs10/$0.1 to Kshs. 100/$1 for a kilo of cherry delivered are still the highest paid in the world. Gachagua gamble is paying off with farmers in Nyeri and Kirinyaga getting around Kshs. 100/ $1 per kilo of cherry delivered showing potential of direct marketing.
The main problem is productivity per tree (just like all our agriculture across Africa).  Small scale farmers will have to do at least 10kg per tree for break even of the yearly input. On average we are doing 3kg after the KPCU thefts since 1990s to date.

[hk]

This year we sold coffee at $9 per kilo which is really good.

I was startled by this figure.   I'm not saying it is wrong, but may I ask for the source.   

If you go here, you will find the KNBS Economic Survey 2017:  https://www.knbs.or.ke/  On page 130, the figure given for coffee is Sh. 472 per kilo; that's about $4.6 per kilo.   That's for the year 2016.

And here is general world data (for Arabica) up to the end of May:   https://ycharts.com/indicators/world_coffee_arabica_price

The KNBS figure of $4.6 is consistent with the world figures for almost all of 2016 (world average for 2016 is about $4.3).   Since then, i.e. 2017,  the world average has gone down.   But Kenya's figure has gone up to well over twice the world average?

Is Kenya really suddenly managing to sell its coffee at well over twice the world average? Where is that happening and who's buying?

The Nairobi Coffee Exchange in April:

The average price dipped to $214.51 per 50-kg bag from $232.4 in the previous year.

http://nairobicoffeeexchange.co.ke/index.php?option=com_content&view=category&layout=blog&id=10&Itemid=135

That's about $4.3 per kilo.

Really, that's the average price. I sell coffee directly without going through the coffee auction. I sold it to a specialty coffee company who pays good money for good coffee.

[hk]

HK should come clear on the $9 per kilo. Is it cherry, parchment, green beans, roasted beans, a kilo of what?

On average 6 kilos of cherry convert to a kilo of parchment. Parchment is what is largely traded in the coffee market globally for quality purposes.   

Kenyan farmers even when getting a Kshs10/$0.1 to Kshs. 100/$1 for a kilo of cherry delivered are still the highest paid in the world. Gachagua gamble is paying off with farmers in Nyeri and Kirinyaga getting around Kshs. 100/ $1 per kilo of cherry delivered showing potential of direct marketing.
The main problem is productivity per tree (just like all our agriculture across Africa).  Small scale farmers will have to do at least 10kg per tree for break even of the yearly input. On average we are doing 3kg after the KPCU thefts since 1990s to date.

That's price of green beans(milled). The auction price went up this year because production was very low. When there's scarcity, price goes up as world market buyers scramble to buy kenya coffee to blend with lower quality beans. Gachagua idea of hurdling all cooperatives to sell via one marketer was ill formed. I agree production has gone down per tree and this due to cooperatives. Someone who produces good coffee(good husbandry) is paid the same amount as someone who sells lite coffee(nderia). If we breakup cooperatives or a different model  emerges production per tree will go up. Its very disheartening that my neighbor got ksh80 per kg cherry coffee and I got on average ksh.240 per cherry. Yet we have same type of coffee and quality.

[gout]

Commendable. Proof that well tended coffee even lowers the conversion rate. At most 3 kilos of cherry should convert to a kilo of green beans.

With direct marketing it means the roasters will send their scouts to the farms and contract them individually or collectively as CFS like is happening with Avocado farming in Murang'a. With online contacts and tracking by the millers & roasters those taking good care of their coffee will start getting a premium price. A small roaster in Germany can do all our current annual 45,000 tonnes.

I have seen likes of Nestle increasing their groundwork at the farm level - one reason in addition to the good weather, for higher productivity among coffee farmers in Kirinyaga .

HK should come clear on the $9 per kilo. Is it cherry, parchment, green beans, roasted beans, a kilo of what?

On average 6 kilos of cherry convert to a kilo of parchment. Parchment is what is largely traded in the coffee market globally for quality purposes.   

Kenyan farmers even when getting a Kshs10/$0.1 to Kshs. 100/$1 for a kilo of cherry delivered are still the highest paid in the world. Gachagua gamble is paying off with farmers in Nyeri and Kirinyaga getting around Kshs. 100/ $1 per kilo of cherry delivered showing potential of direct marketing.
The main problem is productivity per tree (just like all our agriculture across Africa).  Small scale farmers will have to do at least 10kg per tree for break even of the yearly input. On average we are doing 3kg after the KPCU thefts since 1990s to date.

That's price of green beans(milled). The auction price went up this year because production was very low. When there's scarcity, price goes up as world market buyers scramble to buy kenya coffee to blend with lower quality beans. Gachagua idea of hurdling all cooperatives to sell via one marketer was ill formed. I agree production has gone down per tree and this due to cooperatives. Someone who produces good coffee(good husbandry) is paid the same amount as someone who sells lite coffee(nderia). If we breakup cooperatives or a different model  emerges production per tree will go up. Its very disheartening that my neighbor got ksh80 per kg cherry coffee and I got on average ksh.240 per cherry. Yet we have same type of coffee and quality.

[hk]

Commendable. Proof that well tended coffee even lowers the conversion rate. At most 3 kilos of cherry should convert to a kilo of green beans.

With direct marketing it means the roasters will send their scouts to the farms and contract them individually or collectively as CFS like is happening with Avocado farming in Murang'a. With online contacts and tracking by the millers & roasters those taking good care of their coffee will start getting a premium price. A small roaster in Germany can do all our current annual 45,000 tonnes.

I have seen likes of Nestle increasing their groundwork at the farm level - one reason in addition to the good weather, for higher productivity among coffee farmers in Kirinyaga .

I fully concur, the buyer I sell to has been buying our coffee for the last 3 seasons. They come to our farm to actually see the coffee. We have already locked in the minimum price of this year coffee(rudimentary futures contract). They even offered funding . This in my opinion is the future of coffee sector direct sales under contracts we bypass auction. If this trend holds production and quality will definitely increase.

[MOON Ki]

Here we go with hair splitting. HK track record here is well known. If he says some guys managed to sell it for 9 dollars believe it. Kenya coffee is specialty - probably highest quality coffee out there - and just because the national average is 4 dollars...doesn't mean some people didn't sell for 9 dollars...or less than a dollar like most farmers selling crap coffee get.

Oh.  Given the context (in which Uganda was being compared with Kenya) and the manner in which you immediately started jerking off over the figure, I assumed he was "talking" about national figures.  So it's just some unknown guys who got that price?   In that case, it should not be advertised as a figure to commend the production of coffee to all, with every 5-acre guy possibly laughing all the way to the bank.  At the national level, as opposed to some-guy level, one has to go with the national average.   (At unverifiable-some-guy level, I'm willing to accept anything: maybe some other guys got $11, or $14, or $137, or .... per kilo.   Who knows.)

[RV Pundit]

Or maybe like always you dived in, googled around in a subject you know very little about and then proceeded to split hairs on prices. Everyone know coffee industry in kenya is bleeding. It has a glorious past. It has been leading forex earner in kenya for many years until I think 2005 when tea took over. Uganda has obviously overtaken us. But all HK is saying in few words is that industry can recover. That some people are making serious money.

Of course you can't help but cherry pick - which is good thing - because we are talking coffee beans here.

Oh.  Given the context (in which Uganda was being compared with Kenya) and the manner in which you immediately started jerking off over the figure, I assumed he was "talking" about national figures.  So it's just some unknown guys who got that price?   In that case, it should not be advertised as a figure to commend the production of coffee to all, with every 5-acre guy possibly laughing all the way to the bank.  At the national level, as opposed to some-guy level, one has to go with the national average.   (At unverifiable-some-guy level, I'm willing to accept anything: maybe some other guys got $11, or $14, or $37, or .... per kilo.   Who knows.)

[MOON Ki]

Or maybe like always you dived in, googled around in a subject you know very little about and then proceeded to split hairs on prices.

Yes, when I found the figure surprising, I used Google to find out real figures. I use it routinely for such things, as  I prefer to get my facts sorted out before I argue.  I consider  that to be a much better approach than yours of simply pulling stuff out of your rear end and then proceeding at full speed.

[hk]

This year coffee crop is fetching really goods prices https://www.bloomberg.com/news/articles/2018-02-14/foreign-coffee-buyers-drive-kenyan-prices-to-three-year-high . This is what kenya should concentrate on quality not quantity. Average price of kenyan coffee $5.5 while ugandan $3 though ugandans are killing it on volumes.