by Agrimoney.com
Africa's coffee producers are coming good just when ample supplies are depressing international market prices – although values in Kenya are so strong that stealing beans has become a major industry headache.
Africa's eastern coffee-growing heartland, Ethiopia, Kenya, Tanzania and Uganda, will produce a record 11.9m bags of beans in 2013-14, US Department of Agriculture foreign staff said.
The crop, sufficient to support exports of nearly 8.5m bags, also an all-time high, will add extra supplies to a world market already struggling to cope with existing availability - especially of the arabica beans most commonly produced in the region.
The region is actually regarded as the birthplace of both the main coffee varieties, arabica, which is believed to have originated in Ethiopia, and robusta, in Uganda.
Outside of east Africa, Cameroon and Ivory Coast are Africa's only other notable coffee growing countries.
Relative price immunity
Arabica futures have more than halved in the last two years in New York, and London-traded robusta futures lost nearly one-quarter of their value.
However, African producers have been sheltered somewhat from the international market weakness, which prompted demonstrations in Colombia, by factors including a low cost of production – some cherries in Ethiopia, for example, are still picked from the wild – and government willingness to support growers.
Coffee is an important export for the main east African growing region, accounting for 45-50% of export earnings for Ethiopia, the continent's top producer, with Kenya and Uganda both drawing up fresh coffee development plans.
Furthermore, some African beans gain a premium, particularly those from Kenya, which in 2011 attracted more than $1,000 per 50-kilogramme bag.
While prices had dropped back to a maximum of $319 a kilogramme at last week's auction in Nairobi, that was still equivalent to 290 cents per pound, far more than arabica futures trade at in New York.
Theft problem
"The high quality Kenyan coffee is sought after for blending with other varieties from other countries," the USDA staff said.
The demand for the beans has meant that "coffee thefts have occurred at almost every stage of the coffee value chain - at farm, factory, warehouse including in the auction floor – owing to the favourable world prices and lack of a tracking system".
In one raid last week, guards claim they were gagged by the gangsters who covered their mouths masking tape, although police have voiced suspicions that the theft was an inside job.
Robusta vs arabica
Weather help has come in the form of "favourable rainfall" during the so-called Bulg rainy season in Ethiopia between mid-March and May, the USDA staff said.
They also flagged the growing popularity of robusta in the region which, while absent from Ethiopian production, is the subject of a drive for reintroduction into Kenya.
Tanzania's robusta supplies are particularly prized by Italy, which became the top importer of the country's coffee in 2012-13, with a 29% market share, and which uses the robusta beans in production of expresso coffee.
Robusta, while traditionally viewed as a lower quality coffee than arabica, has been viewed in a more favourable light in many coffee growing countries of late, such as India, in part thanks to price outperformance compared with arabica, but also down to resistance to the rust fungus devastating Central American arabica output.
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