China signs pact to buy Kenyan coffee
China has entered into a business partnership to buy local coffee worth over Sh700 million annually.
The agreement between Kenya Planters Co-operative Union (KPCU) and All China Federation Supply and Marketing Co-operatives (AFCFSMC) was signed mid this month.
"The agreement requires the Chinese Government to commence the promotion of Kenya coffee worth not less than Sh700 million per year in the entire Asia and Pacific region," said KPCU chairman Mr Watson Kimathi.
Kimathi and the union’s Managing Director, Mr Peter Kimani, signed the agreement on behalf of KPCU.
The agreement will involve the sale of all grades of coffee beans for two years until June 2009.
The new market for the Kenyan coffee is expected to stretch the ever-dwindling production capacity to its limits in the coming years if farmers do not increase production.
"I appeal to all coffee growers to increase production so as to enable KPCU supply the emerging and fast growing coffee market in China, whose population is now approaching 1.5 billion people," said Kimathi.
Kimathi said KPCU would acquire modern coffee value addition machinery to ensure the Kenyan coffee entering the Chinese market had met all the value addition conditions.
A memorandum of understanding for the purpose of acquiring the machinery, said Kimathi, was signed four years ago.
"We strongly believe that with this promotion, the demand for our coffee in the region will rise steadily and could easily outstrip the supply, considering production has declined from a high of 130,000 tonnes in 1988/89 to a low of about 50,000 tonnes this season," he added.
He noted that China was among the fastest growing coffee markets in terms of per capita consumption in the world.
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