coffee market outlook cabrio ruiru coffee fair - 2016 · pdf filecabrio ruiru coffee fair -...

CABRIO RUIRU COFFEE FAIR - 2016

COFFEE MARKET OUTLOOK

BY:- GRENVILLE MELLIINTERIM HEAD – COFFEE DIRECTORATE


Uses of Coffee. Coffee is cultivated mainly for consumption as

a beverage. However, coffee has found new uses as

perfume, medicinal drug, wine, beautification among others.

Generally the annual demand for world coffee consumption has been growing at an annual rate of 2.4%.


Statistics at a glance For example, the statistics for the actual annual

increase for the last four years are as indicated below:-

Year 2011 2012 2013 2014 Avg.annualincrease

No. of 60kg Bags

139,483,000 143,140,000 147,113,000 149,823,000 2.4%


The outlook consumption of coffee exporting countries


No. of 60kg Bags

42,788,000 44,196,000 44, 926,000 45,558,000 2.2%


The outlook of coffee importing countries


No. of 60kg Bags

96,695,000 98,944,000 102,185,000 104,265,000 2.5%


A number of countries also add value to thecoffee and then re-export. These includeEuropean Union, Japan, Norway, RussianFederation, Switzerland, Tunisia, Turkey andU.S.A.


WORLD PRICES World coffee prices fell in December, 2015 reaching its

second lowest average of the years at 114.63 US cents/lb

The decrease was entirely attributed to the drop in Robustaprices over the course of the month. Global coffee prices gohand in hand with global production in each crop year.

The 2015/2016 crop estimates comes to 143.4 million 60kgbags.


WORLD PRICES FOR THE LAST THREE YEARS

Coffee year ICO composite indicator Colombian Milds Other Milds Brazilian

Naturals Robustas Kenya/50kg

2012/13 162.17 199.95 191.10 177.69 115.16 166.70

2013/14 155.42 196.69 197.78 168.43 105.67 212.76

2014/15 150.07 185.75 192.69 161.70 102.79 205.02

2015/16 127.90 154.92 165.30 137.48 89.58 175.36


0

50

100

150

200

250

300

Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec

2012/13 2013/14 2014/15 2015/16

PRIC

ES IN

USD

/50

KG

BAG

KENYA vs WORLD COFFEE PRICES

ICO composite indicator

Colombian Milds

Other Milds

Brazilian Naturals

Robustas

Kenya


104

106

108

110

112

114

116

118

Pric

e

ICO composite price (US cents/lb)

ICO composite price


Graph 2: Sales 1-8 comparison for the current 2015/2016 and the previous season 2014/2015

0

50

100

150

200

250

300

2015/16 Combined AVG price 2014/15 Combined AVG price

BRANDING OF KENYAN COFFEE

Branding of Kenyan Coffee

A brand is a memory. As the saying goes, bad memories disappear faster than they come and good ones last for a time immemorial.

A good brand name is an asset. Kenyan coffee has been branded ‘Coffee

Kenya’ as a Mark of Origin to position itself distinctively in the mind of the consumer.


Branding of Kenyan Coffee continues….. Good prices are usually derived on the basis of a strong brand name and Kenyan coffee industry has

it in the name of Coffee Kenya. Currently nine coffee stakeholders have been licensed

Dormans Coffee Limited Dedan Kimathi University of Technology Sasini Coffee Sustainable Management Services Coffee Management Services Sangana Commodities Rashid Moledina & Co (MSA) Limited Gibsons Coffee Limited Kenya Nut


Branding of Kenyan Coffee Price discovery lies with the consumers who

value quality.

The Directorate has therefore initiated afeasibility study on the use of the Coffee KenyaMark in Germany, the leading importer ofKenyan Coffee.


Branding of Kenyan Coffee

In the event of a successful research findingswith favorable market entries, Kenya willofficially launch the usage of Kenya coffeeproducts bearing the Coffee Kenya Mark in theperiod of September-December, 2016.


Branding of Kenyan Coffee This will help address the big debate of if it

costs USD 3 for a cup of coffee in a largeAmerican or European City, but a farmer getsonly 3 US cents per cup.

The Coffee Kenya Brand is intended to fix thatsituation


VALUE ADDITION

Consumption promotion at Kenyatta University.


Consumption promotion at Moi University


Value addition The future of good coffee prices lies in value addition The potential of domestic market has not been fully exploited The Directorate carried out census of Coffee Houses in November and December

2015 The actual result shows that there are 170 coffee houses spread across the country This is an increase from 14 Coffee Houses in the year 2000.

According to this census about 245, 631 Kgs of coffee is consumed through thecoffee annually.

Statistics for home consumptions, hotels and other outlets like work places is beingworked

There’s need to roast and ground so that our farmers take production from seed tocup or ground coffee.


Value addition Taking control of more steps in processing

coffee provides farmers with extra income.

Farmers could also offer and charge eco-tourism like coffee safaris which is attractive topeople who like the coffee environment.


Coffee payment rates In 2014/2015 the highest cherry payment

rate of Ksh 91.65 was made at Gakuyu-inifactory of Thirikwa Fcs in Kirinyaga County

In the same coffee year the lowest was Ksh7 paid at Iringa factory at Nyachenge Fcs inKisii County


CHERRY PAYMENTS

COUNTYMEAN RANGE

2012/13 2013/14 2014/15 2012/13 2013/14 2014/15BARINGO 41.44 29 - 51 BUNGOMA 26.56 31.62 35.21 16 - 35 24 - 44.6 17 - 53 ELGEIYO MARAKWET 33.8 33 - 34.2 EMBU 33.42 47 49.36 8 -5 1.15 20 - 74 19.3 - 78.7 HOMABAY 25.29 23.33 20-32 17 - 30 KERICHO 32.83 43.1 49.33 36 - 51 33 - 65 KIAMBU 38.56 15 - 63.6 KIRINYAGA 36.62 50.75 56.67 20 - 52.6 17.6 - 88 11 - 91.65 KISII 31.06 23.32 28.76 10 - 58.70 7 - 37.25 10.35 - 56.95 MACHAKOS MERU/THARAKA 40.44 41.99 22.5-59.11 16.75-58MIGORI 22.75 19.41 12 - 35 16 - 22.45 MURANGA 30.27 38.77 43.56 20.00 - 42.8 5 - 65.85 5-91.10 NAKURU 41.19 37.35 20 - 53.42 35.00-40

NANDI 31.28 49.03 43.34 21.40-38.90 21 - 88 21.00-53

NYAMIRA 34.18 27 29.816.60 -

49.92 18.60 - 38 20.95-36.90

NYERI 34.79 47.53 51.99 10.00-53.45 16.30 - 75.45 21.7 0- 80.90 THARAKA 39.19 38.78 25 - 58.08 TRANS NZOIA 22 30.98 30.25 16.25 - 33 24 - 36.10 WEST POKOT 21.6 36.5

Is the Coffee Market Outlook Bright?YES

REVENUE= QUANTITY X PRICEAVERAGE PAYMENT RATE PER 1KG= Ksh 65COST OF PRODUCING 1KG CHERRY= Ksh35

PROFIT PER KG= Ksh 30So it is Ksh 30 x ?THIS IS THE BIG QUESTION WE NEED TO

ADDRESS!


THANK YOU

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