Kenya Agribusiness Report Q1 2017

LONDON, Dec. 18, 2016 /PRNewswire/ -- Kenya will continue to underperform its regional peers with regard to the development of its agricultural sector. Despite COMESA granting another extension to the sugar import safeguard, which will provide a short-term boost, we expect the country's sugar sector to remain regionally inefficient and to post very limited growth over the coming years. However, we continue to forecast steady coffee production growth due to improvements in husbandry techniques. Kenya largely avoided the El Niño-related droughts that affected grain production in southern Africa, but the country will face more expensive corn imports due to elevated regional prices.

Key Forecasts

- Corn production growth 2014/15 to 2019/20: 10% to 3.1mn tonnes. Corn production growth will be fairly limited, as subdued prices relative to previous years will limit plantings, while yield growth will be poor. Most of the gains will be due to base effects.

- Wheat consumption growth 2015 to 2020: 12% to 2.1mn tonnes. Kenyans already have a high rate of wheat consumption by regional standards. Improvements in availability and growth in population and incomes will drive consumption.

- Coffee production growth 2014/15 to 2019/20: 324to 809,000 60kg bags. Growth will be driven by increased financial support from the government in the form of funds and debt relief. In addition, new coffee varieties are likely to help boost yields. Much of this growth will be due to low base effects, however.

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