CMA to oversee coffee exchange in proposed regulations

The Nairobi Coffee Exchange (NCE) will soon undergo a radical transformation in management should the proposed recommendations by the National Taskforce on Coffee Sub-Sector Reforms set sail.

Capital Markets Authority (CMA) will become the new regulator as outlined in the proposal removing the NCE mandate from the current Kenya Coffee Producers and Traders Association (KCPTA).

Profound changes will also be witnessed in the exchange’s current board of directors with the Principal Secretaries of the Ministries of Agriculture, Finance and Cooperatives being incorporated on the board.

The current board of directors composed of farmers, processors and traders will remain on the board but on a diminished role and will be appointed by the Cabinet Secretary in the Ministry of Agriculture.

The comprehensive rework in the Nairobi’s Coffee Exchange top management is intended at bringing about transparency in coffee trading in the country following price manipulation allegations by some of the stakeholders engaged in the trade.

Global traders have been accused of marking-down the price of coffee at the NCE auction to obtain an unfair profit margin at the international market level.

The traders who at the moment sit at the board are also accused of having the upper-hand in market-price determination resulting in an inequitable share of decision making at the exchange’s helm.

The proposed wholesome changes at the coffee exchange are part of the government’s concerted efforts to interrogate the challenges bedeviling the country’s coffee industry.

The industry has almost consistently taken a tumble over the last decade, turning the once lucrative export industry to an unprofitable one.

Coffee farmers have suffered the most from these hiccups as they continue to face a barrage of coffee produce theft, delayed payments, poor marketing strategies and the mismanagement of co-operatives.

The culmination of all these factors has resulted in the closure of many coffee processing factories as farmers turn their backs on coffee farming into more profitable ventures such as real estate.

Last week, President Uhuru Kenyatta initiated the creation of the Coffee-Sub-Sector Implementation Committee (CSIC) to spearhead and coordinate the successful implementation of the recommendations outlined in the National Task Force on Coffee Sub-Sector Reforms report.

The committee’s immediate task is to facilitate the resurgence of Kenya’s coffee industry.


CMA auction Capital Markets Authority Coffee regulations Kenya Coffee Producers and Traders Association NCE oversight reforms

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