Kenya Increasing Coffee Roasting to Lift Earnings

Continued...(by Duncan Miriri, Reuters)

Kenya grows just 1 percent of the world's coffee a year, but punches above its weight in quality as many global firms seek its arabica beans to blend with lower quality varieties.

However, most of its produce is exported as cleaned beans and just 5 percent is roasted, so Kenya misses out on the added value from selling roasted and packaged coffee.

Kenya produced 45,000 tonnes of beans in the 2015/16 season and forecasts output of 50,000 tonnes in 2016/17.

It is seeking to raise the amount of coffee roasted locally by 5 to 10 percent annually over the next five years, Richard Lesiyampe, principal secretary for agriculture, told Reuters.

"Any value addition that can give us more money, that is the direction we want to take. We should actually go to 50 percent if possible," he said. "It is really ambitious but can be done."

In the coffee growing region of the central highlands, Othaya Farmers Co-operative is installing a roasting machine and a grinder at a cost of 50 million shillings ($500,000) to produce packed coffee for local retail and export in future.

The aim is boost earnings for the co-operative's 15,000 farmers, who now earn a maximum of 78 shillings per kg on the best quality raw beans but could earn 100 shillings after roasting, co-operative chairman James Gathua told Reuters.

While a 50-kg bag of top grade AA coffee fetches about $500 at the weekly auction in Nairobi, a bag of lower grade coffee goes for about $150. But experts say the value of this lower grade coffee can be doubled when roasted.

"Opportunities exist for private partnerships with roasters abroad, who have expressed interest in investing in roasting machinery in Kenya," Kenya's industry regulator, the Coffee Directorate, said in response to questions.

Among the new entrants, Denmark's African Coffee Roasters (ACR) set up a roasting facility this year.

For now, local roasting is dominated by C. Dorman Ltd, which operates a chain of coffee shops in Kenya and also exports to foreign markets, and Java House, which has a fast growing chain of coffee shops and restaurants that is expending beyond Kenya.

President Uhuru Kenyatta launched a study this year into ways of revive coffee production, now roughly half output at its peak in the 1980s.

Growers want the government to support producers including by removing duty on roasting machines.

"If the government can support us, the portion of locally roasted coffee can go to 10 percent in the next three years," said Matthew Mugo, the managing director of Gibsons coffee Co.