Selling coffee directly to overseas buyers helps farmers get high income

Posted on :Tuesday , 30th August 2016

Cooperatives that paid coffee farmers the highest rates have revealed their secret: selling their produce directly to overseas buyers.

And because of the direct sales, the Meru County Coffee Millers Cooperative Union will pay farmers a billion shillings at the end of this year.

In Nyeri County, Barichu, Gikanda and Othaya coffee societies got the highest rates at Sh85, Sh81 and Sh76 per kilo respectively. Rutuma Coffee society paid the least at Sh21.

According to Gikanda’s chairman Joseph Mukuha their marketer, Sustainable Management Service of Thika, helped them sell their coffee directly to a European coffee-buying company known as Ecom Group. By selling directly to Europe, the farmers got $400 (Sh40,000) per 50 kilos of coffee. This is compared to $300 (Sh30,000) they were getting at the Nairobi auction.

“We sold our coffee in February and March when the prices were high as every factory chose a different marketer,” said Mr Mukuha, adding that earnings can also depend on how “experienced the marketer is.” They paid more than Sh148 million to farmers.

Othaya Coffee Factory sold its produce directly to USA, Taiwan, Switzerland, UK, Denmark and Norway through their marketer KCCE.

NOT PROMISING

According to the society’s chairman, the local market at the auction was not promising and they sold different grades of coffee from $50 (Sh5,000) to $280 (Sh28,000) per 50 kilos. However, the international market offered prices ranging from $300 (Sh30,000) to $520 (Sh52,000) for every 50k bag of coffee.

“The international market is looking for the best quality of coffee. They choose from grade AA, AB,BE and CB,” said Mr Gathua of Othaya Coffee Society.

The Meru County Coffee Millers Cooperative Union payments to farmers are set to hit Sh1 billion at the end of this year. This is after selling 36,159 bags of clean coffee, translating to 1,821 tonnes, since the miller started operations in 2014.

The miller’s general manager John Karira said they are now focusing on improving service delivery and increasing the milling capacity as more societies were delivering their coffee to the miller.

The Meru miller is also engaging two international buyers who have expressed interest in buying directly from the farmers.

“One American buyer wants us to deliver about 20 tonnes of coffee for the next five months,” Mr Mbaabu said.

Due to the increasing supply of coffee, Mr Karira said the mill was processing 3.6 tonnes of coffee in 24 hours. He said the miller requires about Sh15 million to upgrade its machines to mill four tonnes of coffee in a day.

The miller started operations in 2014 after the Meru county government gave out a Sh2.5 million grant to coffee farmers to lease a KPCU mill.

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