This archive report was first published on 23 July 2019.
Kenya's coffee sector is set to benefit from new regulations that will bring the industry under the watchful eye of the Capital Markets Authority (CMA). The new rules require coffee buyers to pay farmers within five days of taking delivery of the commodity.
According to the Crops (Coffee) (General) Regulations, 2019 published on July 1, 2019, the Nairobi Coffee Exchange (NCE) will now be regulated by both the CMA and the Agriculture and Food Authority. The exchange, which has been operating as the NCE, is now defined as a 'company incorporated under the Companies Act and licensed by the CMA as an exchange for trading in clean coffee.'
Over 90 per cent of coffee produced in the country is traded through the NCE-managed auction, with the balance being direct sales. The new regulations will also bring coffee brokers under the watchful eye of CMA but will also have to be licensed by the exchange.
The regulations also require all industry players to digitise their operations within the next year. This includes county governments, cooperatives, and other service providers. The digital systems must have capabilities to withstand challenges such as hacking, and they will also give access to other players to facilitate fast handling of the commodity as well as prompt payment of farmers.
"The authority, county governments, every licence holder, certificate holder, and service provider shall digitise and automate their operations for efficient service delivery and information dissemination," read the newly published regulations.
