East African Coffee Farmers Reap Gains as Global Prices Surge

East African coffee growers are benefiting from a fresh rally in global prices, with raw Arabica beans climbing more than 20 percent so far this year driven by a poor harvest in top producer Brazil and rising trade tensions.

Kenya, renowned for its premium Arabica, saw prices at the Nairobi Coffee Exchange edge higher this week, with a 50-kilogram bag selling for $410, up from $402 in the previous auction.

Industry officials say farmers across the region, including Ethiopia, Uganda and Tanzania, are seeing higher returns as nearly all of their beans are destined for the international market.

Despite producing some of the world’s most sought-after Arabica, domestic consumption in East Africa remains limited, with more than 90% of output exported.

That reliance on foreign buyers leaves farmers vulnerable to volatility but also ensures they are quick to benefit when prices rise.

The latest rally has been fuelled by a combination of factors. Brazil’s harvest has been hit by erratic weather for a second consecutive year, reducing global supply.

Climate risks are adding uncertainty to future output, while US tariffs of 50 percent on Brazilian coffee imports have further tightened the market, prompting roasters in the world’s largest consuming nation to dip into stockpiles.

For global roasters, the surge poses a challenge. Raw beans account for roughly 40 percent of the wholesale cost of a bag of roast and ground coffee, meaning higher procurement costs are likely to be passed on to consumers.

Analysts expect retail coffee prices to climb further in the coming months, extending gains already seen over the past year.

“Costs are rising across the supply chain, and consumers should brace for higher prices in the cup,” said one regional trader.

The gains offer East African producers a short-term windfall, but industry officials warn that sustained volatility and climate pressures could undermine long-term production.

For now, though, exporters are enjoying rare momentum in a market that often swings against them.

gandae@businessdayafrica.org