Business Daily (Nairobi)
Allan Odhiambo
3 March 2008
Farmers are set to benefit from cheaper packaging of coffee as regulators revise standards in line with global export practice.
The new standards, being fast tracked by the Kenya Bureau of Standards and the Coffee Board of Kenya, will see a shift from sisal, the predominant material in packaging coffee, to other materials like jute.
About 95 per cent of coffee sold globally is packaged in jute bags.
"We have singled out packaging as one area that requires urgent attention. We are fast tracking issues such as food grades to allow alternative materials such as jute," Loise Njeru, Coffee board's managing director told the Business Daily.
Analysts said the adoption of jute as a packaging material would translate into substantive cuts of up to 23 per cent in the cost of coffee export bags.
"The idea is brilliant because jute is much cheaper than the sisal bags we have had around over the years," Mr Etienne Delbar of Socfinaf Coffee Limited said.
He said Socfinaf had imported some 21,000 jute bags which it will introduce initially on lower grade coffee.
Farmers pay an average Sh130 for a single export bag, a cost considered too high by exporters.
Critics blame flaws in the procurement process where growers are at the end of the production chain and have no say in the prices.
Until last year, growers were supplied with sisal bags sourced through schemes by dealers and the cost later recovered from them.
In a bid to clear flaws in procurement systems, CBK removed that mandate from dealers, passing it on to millers to charge farmers directly for the bags.
They argued that packages are part and parcel of a product and should not be charged separately.
Today millers factor the bags in the overall cost of production -an issue that is anticipated to trigger competitiveness and clear any forms of cheating in the procurement process of the bags.
Mr Delbar said standard jute bags would retail for an average Sh100.
Besides the cost factor, experts said jute bags have more advantages such as being environmentally friendly, they are completely biodegradable and do not easily tear.
The product also has high re-usability, porosity and can withstand high temperatures.
But as CBK prepared to allow jute bags, marketing agents from several manufacturing firms especially in Asia are already jostling to win supply contracts from customers in Kenya.
Several players confirmed having received offers even by e-mail or even physical visits by the frenzied marketers.
The industry regulator however warned that only bags that fall within its set standards would be allowed for use locally and urged for caution when dealing with the different manufacturers. Attempts to introduce the jute bags into the Kenyan coffee industry a few years turned a major fiasco with some millers shipping in substandard products only to be blocked from using them by the regulator.
"We had different products of different qualities and specifications other than what we wanted coming.
This did not augur well with marketing abroad and we had to halt the introduction of the jute bags and call things into order first," an inspector with the board told Business Daily.
The Kenya Coffee Producers and Traders Association (KCPTA) has already indicated that it will assist in the supervision of its members to ensure they fully complied with the set standards on the jute bags.
"We are developing acceptable standards of jute...were shall consider aspects such as food grade and the right weave type so that the beans do not get destroyed or spilled during storage of transportation," the association's vice chairman Dirk Sickmueller said in a recent interview.
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