Daily Coffee Report 8/11/26
Daily coffee report
StoneX Coffee Team
- Coffee
USDA Attache: Kenya’s 2022-2023 Coffee Crop to Drop 10% to 700,000 Bags
By: CommodityNetwork Team - USA, CommodityNetwork USA
USDA Attache: Kenya’s 2022-2023 Coffee Crop to Drop 10% to 700,000 Bags
CoffeeNetwork (New York) – According to the latest USDA attache report, Kenya’s coffee production will decrease in MY 2022/23 by 10 percent to 700,000 bags due to lower yields as rising fertilizer prices trigger reduced fertilizer application. Currently, fertilizer prices in Kenya stand at KSH 6,000 ($53) per 50 kg bag, a 71 percent increase from the previous year. The government of Kenya (GOK) announced a $10 million fertilizer subsidy in March 2022 to partially offset fertilizer prices.
Additonally, yields in MY 2022/23 are expected to decline due to cyclical variations. Arabica coffee undergoes a three-year cycle, with yields increasing over two years and then falling in the third. Many of Kenya’s coffee trees are primed to experience declining yields in MY 2022/23 after peaking in MY 2021/22.
Post predicts a slight increase in area harvested in MY 2022/23 from 104,000 to 105,000 hectares as some farmers respond to high coffee prices by rehabilitating abandoned trees in MY 2021/22 for future harvest. MY 2022/23 area planted is anticipated to remain steady at 105,000 hectares as both the creation of new plantations and the conversion of coffee farms into real estate stagnate. Industry sources indicate that the growth of new coffee plantations has been curtailed by a shortage of planting materials, particularly coffee seeds which are primarily supplied by Kenya’s Coffee Research Institute (CRI). CRI sells coffee seeds at cost to Kenyan farmers, but seed production has been disrupted due to high production costs and limited resources. Coffee seed production is very labor-intensive, requiring hand pollination and controlled irrigation of coffee trees. This year CRI estimates it will produce .15 tons of coffee seeds for development into seedlings compared to a demand of 1.5 to 2 tons of seeds.
MY 2021/22 production is forecast to increase 20 percent year-on-year to 780,000 bags due to higher yields from good weather conditions and better husbandry. Rainfall in MY 2021/22 was advantageous for arabica coffee, with dry conditions triggering robust flowering followed by nourishing rains during budding. Additionally, higher prices encouraged farmers to invest more in tending to their trees through pruning and other husbandry practices.
Consumption
Post anticipates a marginal increase in Kenya’s domestic coffee consumption in MY 2022/23 from 30,000 to 32,000 bags. While consumption is forecast to rise as Kenya’s tourism and restaurant sectors recover following the removal of COVID-19 restrictions, growth in domestic consumption will be constrained by high inflation, which is reducing consumer purchasing power. Coffee consumption is considered a non-essential expense, making it sensitive to changes in purchasing power. Between January and April 2022, Kenya’s inflation averaged 6.2 percent, up from 5.2 percent over the same period in 2021. The International Monetary Fund (IMF) forecasts that inflation will further increase to 7.2 percent in 2023.
Trade
Post estimates that coffee exports will decline 11 percent year-on-year to 670,000 bags, as lower domestic production reduces exportable supplies. Although Kenya’s coffee attracts relatively high prices compared to coffee from other countries that produce mild arabicas, Kenya coffee accounts for less than one percent of world coffee exports. In MY 2020/21, the United States remained the leading export destination for Kenyan coffee. Other key destinations included Belgium, Germany, and South Korea.
Kenya imports a small amount of soluble coffee for use in the hospitality sector. Post forecasts soluble coffee imports will increase slightly from 13,000 to 15,000 bags in MY2022/23 as the hospitality sector recovers following the termination of COVID-19 restrictions.
Stocks
MY 2022/23 ending coffee stocks are expected to hold steady at 171,000 bags, enough to cover exports before the main crop arrives in the market in January. Stocks are largely held by millers, marketing agents, and exporters, while smaller amounts are kept by individual large-scale farmers and cooperatives in the form of parchment coffee.
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Daily Coffee Report 8/10/26
Daily coffee report
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- Coffee
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