Kenya and other African countries are facing potential losses as the European Union begins enforcing a law that bans the sale of products connected to the destruction of natural habitats, such as forests, which is a primary contributor to climate change.
Key European purchasers of coffee from Africa have already begun reducing their commodity acquisitions in anticipation of the forthcoming regulation.
The EU Deforestation Regulation (EUDR), slated to take effect next year, extends its impact to commodities like coffee, palm oil, and cocoa, causing apprehension among traders who fear potential repercussions for non-compliance.
Ethiopia, the largest coffee exporter in Africa, is already feeling the effects of this legislation with reduced orders being witnessed.
Reuters reports a decline in orders for Ethiopian coffee, affecting numerous small-scale farmers dependent on sales proceeds. Johannes Dengler, an executive at German roaster Dallmayr, remarked, “I see no way of buying significant quantities of Ethiopian coffee going forward.”
Traders express concerns that coffee bought now might end up in products sold within the EU in 2025, subjecting them to penalties if not compliant with EUDR standards.
The regulation mandates companies to digitally map their supply chains, tracing raw materials to specific plots, potentially impacting small farms in remote areas.
Europe, being the largest buyer of Kenyan coffee, significantly contributes to farmers’ income and foreign exchange.
Belgium, which is the headquarters of the European Union, was the top buyer in the last financial year, having imported coffee worth $64 million (Ksh7.4 billion), marking a 17 percent increase from the previous season.
Germany, positioned third, purchased coffee worth $36.7 million (Ksh4.2 billion), an improvement from $28 million (Ksh3 billion) in the preceding year.
Deforestation, a major issue in Africa, ranks as the second leading cause of global warming globally, following fossil oils.
The European Commission says it has implemented measures to assist producing countries in complying with the EUDR.