Kenyan coffee co-ops sell direct to South Korean buyer for first time

Farmers have been able to double their earnings by cutting out the middlemen

Co-operative coffee farmers in Kenya made their first direct export to South Korea last week, marking the start of better revenues for the co-ops. 

Kipkelion District Cooperative Union (KDCU), an umbrella of 64 primary coffee co-operatives, flagged off a consignment of 134.4 tonnes of coffee beans to South Korea last Friday 11 February. This is the first time the farmers have been able to sell directly to their buyer without going through independent brokers, or taking their product to auction. 

The governor of Kericho County Paul Chepkwony described the flagging off ceremony that took place in Nairobi as a defining moment for Kenyan coffee farmers, Capital Business reported. Mr Chepkwony encouraged more farmers to cut out the middlemen in selling their coffee for a better price.

Last week’s sale, valued at US$908,160 (KES103.21m; £667,520) will go to 9,582 co-op members from the Kericho, Nandi and Bomet counties at an estimated rate of KES 100 per kilo (65p). KDCU says that if sold through the Nairobi Coffee Exchange(NCE), the coffee would have earned farmers a maximum of KES 50 per kilo.

KDCU recently set up a brokerage firm to enable them to market their coffee, following reforms in 2020 which allowed coffee farmers to directly sell their produce; previously they had no option other than to go through independent brokers. 

Despite the brokerage firm being licensed by Capital Markets Authority, the NCE is yet to grant it access to the local auction.

The deal made between KDCU and South Korean company Goodbeans was made last July, following a four-day Coffee Expo held in Seoul, at which Kenya was the guest country. The event facilitated conversations between a number of coffee co-ops and South Korean importers. 

Coffee has rapidly grown in popularity in South Korea over the past decade, with a 2018 survey finding coffee to be the most popular beverage in the country. More than 2.5 million 60kg bags of coffee were consumed in South Korea in 2020.

KDCU’s CEO, Festus Bett, told Co-op News that the direct sale to Good Beans means that KDCU will now be able to get more primary co-operatives on board, to export more coffee to Korea and other markets, for the best prices. 

“Our production will go upwards as farmers are motivated to do coffee farming. We now have tea and cane farmers inquiring about coffee farming”, he said. 

Mr Bett added that other co-ops are planning to follow KDCU’s lead and begin to sell directly to buyers, saying, “in future, most will engage the buyers directly as the farmers will have control on the prices. In fact, there are already six more coffee unions from eight counties who are going to export directly.”

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