KENYA – AFEX Fair Trade Kenya, a subsidiary of Nigeria’s commodities exchange and commodities market player, AFEX Fair Trade Limited (AFTL), has become the first private company in Kenya to be licensed as Private Warehouse Receipt Operator by the Warehouse Receipt System Council (WRSC).
A warehouse receipt is a type of documentation used in the futures markets to guarantee the quantity and quality of a particular commodity being stored within an approved facility.
Launched in July 2020 by Kenya’s Ministry of Agriculture, the Warehouse Receipt System (WRS) allows farmers to hold their products in certified warehouses.
At the certified warehouse, the product can be tested, cleaned, graded, and then stored, with the owners of the commodity receiving a receipt as proof of ownership.
This allows the farmers to sell their produce when prices are favorable while reducing post-harvest losses, which stand at between 20-30 percent within 6 months after harvest if no intervention measures are undertaken in the country.
WRSC chief executive officer Samwel Ogola congratulated the AFEX Fair Trade Kenya, saying the “certification opens the space for private investment and participation in the Warehouse Receipt System in Kenya.”
With 17 warehouses spread across two counties in Kenya, AFEX has registered over 11,000 farmers and traded over 11,000 metric tonnes of maize and aims to add rice, sorghum, and coffee to the exchange.
“We look forward to a time when every AFEX warehouse is certified and licensed as a warehouse receipt operator,” the company’s Managing Director, Tabitha Njuguna, said.
In achieving these goals, the company noted it will support Kenya’s food security while promoting a fair exchange of value among players in agricultural value chains. AFEX enables farmers to participate in market opportunities through its unique platform WorkBench.
The platform allows farmer transactions with AFEX’s network of warehouses to be executed and recorded, supporting seamless trade across the warehouses currently operational in Kenya.
AFEX Fair Trade Kenya targets to transact with 100,000 farmers, and trade over 500,000 metric tonnes of commodities by 2025.
In July 2022, the Parent company of AFTL launched a US$1m loan program that will allow farmers to gain access to seed and fertilizer for their crops, to mitigate ever-rising commodities prices.
Under the program, 5000 Kenyan farmers were targeted to take out input loans to access timely inputs and gradually scale their businesses.
Before establishing its foothold in Kenya, AFEX launched a pilot operation in the country last quarter of 2021.
The company established several challenges local producers were experiencing. For example, in Uasin Gishu County, in the North Rift region of Kenya, AFEX noticed there was limited access to affordable storage facilities, which meant many farmers storing their crops at home.
Additionally, despite a high level of mechanization and relatively expansive land holdings, producers find themselves cut off from opportunities to sell their produce, often relying on middlemen.
Since its expansion to Kenya, the company says it has already recorded significant results and plans to expand even more to Benin, Togo, Ghana, Côte d’Ivoire, Tanzania, Ethiopia, Uganda, and Zambia within the next 10 years.
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