In Kenya, both the coffee and dairy sectors are experiencing positive changes that are benefiting farmers. Traded volumes and prices at the Nairobi Coffee Exchange (NCE) have rebounded, thanks to the arrival of higher-quality fresh crop and deliveries of old stocks from co-operative societies in the Mount Kenya region. The NCE has seen a significant improvement in the volumes of coffee beans sold, with an increase from 40% to 84%. The average price of premium coffee beans, AA grade, has declined to Sh38,377.58 ($240.10) per 50-kilogram bag, while the price of AB grade has risen to Sh30,281.68 for the same quantity. This rebound is seen as an early success of coffee sector reforms in Kenya, which have led to increased coffee production and earnings. However, the estimated area under coffee cultivation has decreased in recent years.
In the dairy sector, New Kenya Co-operative Creameries (New KCC) has increased farm-gate milk prices by KSh 5 per litre, from KSh 45 to KSh 50, effective March 1, 2024. The move aims to cushion farmers affected by high production costs. Milk production has increased due to sufficient rains, with milk intake by processors reaching 75.68 million litres, the highest in 29 months. President William Ruto directed New KCC to buy milk at KSh 50 per litre in January. The dairy value chain contributes to the national, agriculture, and livestock sub-sectors Gross Domestic Product (GDP). Ruto plans to make New KCC more efficient by facilitating training and investing in value addition.
These positive changes in both the coffee and dairy sectors are expected to have a significant impact on the Kenyan economy, benefiting farmers and contributing to the country's GDP growth.
Kenya's real Gross Domestic Product (GDP) grew by 5.6% in 2023, up from a revised growth rate of 4.9% in 2022. The agriculture, forestry, and fishing sectors experienced a robust growth of 6.5% in 2023, a substantial improvement from the 1.5% contraction in 2022. Tea led the agricultural market with a production value increase from KSh 156.7 billion in 2022 to KSh 176.3 billion in 2023. Other valuable crops include horticultural crops, with exports increasing from KSh 147.1 billion in 2022 to KSh 153.7 billion in 2023, and milk production increasing from KSh 36.9 billion in 2022 to KSh 41.0 billion in 2023. However, coffee production declined to KSh 19.9 billion in 2023, and maize production increased to KSh 11.3 billion in the same year. The growth in the agriculture sector was attributed to favorable weather conditions throughout the year. The data was released by the National Bureau of Statistics in their 2024 Economic Survey.
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