Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.
Kenya coffee farmers planting more nuts as macadamia crop yields record profitsWednesday, April 25, 2018 > 10:58:57
Kenyan farmers used to grow macadamia trees to shade their coffee bushes. Now they're making so much from production of the nuts that they're abandoning the beans.
The East African nation, known for its prized arabica coffee, is gaining a reputation for its macadamias with production growing to a record last year. Expansion in the world's third-biggest grower of the crop is being driven by demand from China, according to Nairobi-based agro-processor Nawiri Agribusiness EPZ Ltd.
Farmgate prices for unshelled nuts have risen to as high as 180 shillings (S$2.38) a kilogram (2.2 pounds) this season from about 70 shillings at the start in December, and may climb to 200 shillings, according to Alfred Busolo, head of Kenya's state-run Agriculture and Food Authority. By contrast, many coffee farmers operate at a loss with their beans earning about US$0.55 per kilogram, according to a report last year by London-based advocacy group Fair Trade.
"Farmers are beginning to discover that this is gold," said Loise Maina, one of three founders of Nawiri Agribusiness. "Wherever coffee is grown, macadamia also grows and farmers are now aware of the opportunity with macadamia." Kenyan coffee production has dwindled after years of mismanagement by the industry regulator to 38,620 metric tons last year from a peak of 130,000 tons in 1989. Macadamia production increased 5 per cent to 41,614 tons last year, after growing more than 20 per cent over the preceding two years, according to the AFA. At current prices, last year's macadamia crop was worth 7.49 billion shillings. The coffee industry earned 15.9 billion shillings last year, according the Nairobi Coffee Exchange.
Fruity Notes Farmers in Kiambu, Meru, Embu, Murang'a and Kirinyaga - highland regions that surround Mt. Kenya, the source of the volcanic soil that suffuses Kenyan coffee with its strong acidic and fruity notes - are now the biggest producers of macadamia in the country.
Increasing output helped Kenya overtake the US as the third-biggest producer in 2013, a position it's held since then. Australia produced 14,100 tons of nut kernels last year, compared with South Africa's 13,383 tons and Kenya's 5,795 tons, according to the Reus, Spain-based International Nut & Dried Fruit Council.
Production is expected to increase within the next four years when saplings with better yields mature, according to Ms Maina, who sources the nuts from subsistence farmers.
Confectionery, Cosmetics Nairobi-listed agriculture companies including Kakuzi Plc and Sasini Plc have joined small-scale farmers in diversifying into the high-value nuts that are eaten raw, roasted or added to confectionery. Macadamia oil, which is unsaturated and cholesterol-free, is used mainly in pharmaceuticals and cosmetics.
Kakuzi has been producing kernels since 2016, having planted macadamia trees where it once had coffee. Macadamia sales more than doubled to 371.6 million shillings last year, according to its latest annual report, making the nuts the company's second-biggest earner after avocados.
Smaller rival Sasini, which has been growing coffee since the colonial era which ended in 1963, is constructing a macadamia-processing factory that's scheduled to crush its first nuts this month. "Both these new lines of business, macadamia and avocado, show a lot of promise and the respective industries are thriving globally," Sasini said in its latest annual report.
Kenya now has 27 licensed macadamia processors, from just five in 2013, AFA's Mr Busolo said. Other than ensuring there is regulation to govern the sector, the agency will stay out of the industry, he said. With coffee, poor management by the state harmed the industry, farmers say.
"We want the private sector to play a key role, unlike coffee, which had a lot of government involvement," Mr Busolo said.