The Kenyan government will launch a national coffee brand!

According to Kenyan local media reports, the Kenyan Agency for Export Promotion and branding (Keproba) and the Agency for the Regulation and Promotion of Agricultural sector Development (Afa) are planning to develop a unified national brand to increase the export of the country's coffee, and hope to integrate the global marketing and promotion of the country's coffee to strengthen Kenya's influence in the international market.

However, Kenyan coffee production has continued to decline in recent years, and Kenyan coffee exports have been unstable since 2016. The coffee industry in Kenya has been faced with factors such as reduced acreage, rising production costs, price fluctuations and unpredictable weather conditions.

In recent years, the Kenyan government has been promoting the reform of the coffee industry, eliminating intermediaries to increase the income of farmers through the Direct settlement system (DSS) of the Nairobi Coffee Exchange, which can lead to changes in international coffee prices that have a direct impact on local crop production.

Although this helps farmers to make higher profits when exporting coffee, it also brings some negative effects, excluding intermediaries and preventing coffee processing plants set up by some well-known international trading companies in Kenya from obtaining licenses. this led to the closure of these large coffee processing plants. In addition, it is stipulated that processing can only be carried out in processing plants that have obtained many operating licenses and designated by the government, but this has led to an increase in orders from some small processing plants, but a shortage of production capacity and manpower. The coffee berries to be processed in the processing plant have serious accumulation problems, resulting in problems such as decay, and the output and quality have declined.

Earlier, the Nairobi Coffee Exchange (NCE) in Kenya reported that 29000 tons of coffee were auctioned in the first half of 2024, with an average price of 140.5 shillings, an increase of 40 per cent in exports and a 9 per cent increase in unit price compared with the same period last year.

Although the number of coffee transactions at the Nairobi Coffee auction Center continues to grow, all due to Kenya's earlier suspension of coffee ranking due to coffee industry reform, and now the resumption of auction transactions has led to an increase in trading volume. In addition, it has benefited from the stimulus of rising international coffee prices. At the same time, Kenya is a major EU country such as Germany and France, and the EU accounts for 21% of Kenya's total coffee exports. EU traders, concerned about the impact of the non-deforestation Act (EUDR) implemented on December 30, 2024, have increased their purchases to ensure adequate coffee stocks after the law is implemented.

Recently, however, the European Commission said that in view of feedback from many international partners, it was necessary to postpone the implementation of the non-deforestation law (EUDR) for one year, that is, from December 30, 2025 to large local companies in the European Union and to small businesses from June 30, 2026. The proposal is currently awaiting approval by the European Parliament and the Council. However, since all implementation tools are technically ready, an additional 12 months can be used as a phased implementation period to ensure correct and effective implementation.

Even if the non-deforestation law (EUDR) is delayed by a year, traders are still concerned about some underdeveloped coffee-producing countries, such as Ethiopia and Kenya, because they struggle to meet the standards set by the European Union non-deforestation Act (EUDR). According to a report by ODI, a British think-tank, these African countries could increase their costs by 10 per cent to meet the EU deforestation law (EUDR).

However, even with the recent rise in coffee prices in Kenya, the cost of coffee production is also on the rise. It is reported that the limited funding of the Kenya Coffee Research Institute (CRI) and a chronic shortage of certified planting materials have hindered the establishment of new coffee plantations and limited access for farmers to input and extension support, affecting coffee production. Moreover, the Kenyan government has been trying to raise funds through additional taxes to continue to repay interest on high sovereign debt. Although the fiscal bill introduced earlier caused public dissatisfaction and conflicts, the government still intends to continue to increase some taxes, which will undoubtedly cause some local prices to rise.

At present, due to the opening of the epidemic in Kenya, tourism has surged, domestic coffee consumption has increased, and the amount of coffee available for export has been reduced. The Red Sea crisis has led to congestion in Kenyan ports, and the shortage of containers has hindered the export of coffee and other products, so local coffee workers hope that the new government policy will help the development of the industry.

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