Kenya’s domestic coffee consumption is expected to remain flat in the 2026/27 marketing year, as inflation, changing urban consumption habits and slower tourism weigh on local demand, according to the United States Department of Agriculture (USDA).

 

The USDA, through its Foreign Agricultural Service, projects domestic consumption at 62,000 bags in the marketing period beginning in October, unchanged from the current year.“The halt in growth is primarily due to intense inflationary pressures currently straining the purchasing power of local consumers, making coffee less accessible to the average household,” the agency said in a report dated May 18.

It also noted a shift in urban coffee culture, with the rapid expansion of coffee houses and service outlets in Nairobi and other major towns losing momentum.“This decline is largely tied to the departure of several major non-governmental organisations and the withdrawal of key donor operations,” the agency said.“These organisations historically supported the urban middle class and expatriate communities that formed the backbone of the high-end coffee market. Their exit has left a void in demand and reduced the commercial viability of new shop expansions.”The USDA added that tourism, another traditional demand driver through hotels and lodges, could no longer be relied upon to spur growth because of rising travel costs for both domestic and international visitors.“This downturn supports the outlook for a stagnant domestic coffee market,” it said.

Export boostWhile local demand remains weak, Kenya’s export outlook is stronger.

The agency forecasts coffee exports to rise 11.9 percent to 940,000 bags in 2026/27, from 840,000 bags in the current marketing year, supported by higher domestic production and sustained international demand.

Green bean exports remain the backbone of the sector, as Kenya has yet to establish large-scale soluble coffee processing capacity.

The European Union remains the main destination for Kenyan coffee, historically accounting for more than half of exports.

To maintain access, Kenya has introduced traceability systems to comply with the European Union Deforestation Regulation, which bars coffee and other agricultural commodities sourced from land deforested after 2020.

The USDA projects coffee production to rise 12 percent to 950,000 60kg bags, from an estimated 850,000 bags in the current season, driven by expanded harvested area and improved farm management after two years of favourable prices.“After enjoying two years of favourable prices, growers now have the capital to reinvest in their farms,” the agency said.“This reinvestment enables more consistent fertiliser application and more effective control of the pests and diseases that often stifle yields.”Coffee farms in the Mt Kenya growing region also benefited from strong flowering after the drought that persisted until March 2026.

The harvested area is projected to edge up to 106,000 hectares as recent plantings mature.

Sector shiftKenya’s coffee sector is also entering a new regulatory phase following the enactment of the Coffee Act 2026, which restores oversight to the re-established Coffee Board of Kenya.

Average prices at the Nairobi Coffee Exchange have eased after sharp gains in the 2024/25 season, reflecting expectations of improved global supply.

About 80 percent of Kenya’s coffee is sold through producer co-operatives, with the rest handled by estates and individual growers.

The Nairobi Coffee Exchange facilitates more than 95 percent of sales, with the remainder conducted through direct contracts between producer agents and exporters.

Over the past decade, coffee farming in peri-urban areas around Nairobi, Thika, Kiambu and Nyeri came under pressure from real estate development, with farms uprooted for housing projects.

That trend has slowed over the past two years amid stagnation in the property market.

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