Kenya Agribusiness Report Q2 2016
BMI View: Kenya will continue to underperform its regional peers with regard to the development of itsagricultural sector. Despite COMESA granting a one-year extension to the sugar import safeguard, whichwill provide a short-term boost, we expect the country's sugar sector to remain regionally inefficient andtherefore to post very limited growth over the coming years. However, we continue to forecast steady coffeeproduction growth due to relatively high domestic prices and improvement in husbandry techniques. Kenyawill largely bypass the El Niño-related droughts currently affecting SSA, but the country will face moreexpensive corn imports due to higher regional corn prices.
Corn production growth 2014/15 to 2019/20: 16.5% to 3.1mn tonnes. Corn production growth will befairly limited as subdued prices relative to previous years will limit plantings, while yield growth will bepoor. Most of the gains will be due to base effects.
Wheat consumption growth 2016 to 2020: 15.5% to 2.1mn tonnes. Kenyans already have a high rateof wheat consumption by regional standards. Improvements in availability and growth in population andincomes will drive consumption.
Coffee production growth 2015/16 to 2019/20: 8.9% to 980,000 60kg bags. Growth will be driven byincreased financial support from the government in the form of funds and debt relief. In addition, newcoffee varieties are likely to help boost yields.
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