KENYA-The Capital Markets Authority (CMA) has licensed Kirinyaga Slopes Coffee Brokerage Company Limited, as a coffee broker, bringing the total number of licensed coffee brokers in the country to 14.
Kirinyaga Slopes Coffee Brokerage Company Limited, a coffee broker promoted by the Kirinyaga County Cooperative Union, will now join the other 13 cooperative societies already licensed by CMA to conduct coffee trading activities.
The other licensed coffee brokers are Meru County Coffee Marketing Agency Limited; Kipkelion Brokerage Company Limited; Murang’a County Coffee Dealers Limited; United Eastern Kenya Coffee Marketing Company Limited; Mt. Elgon Coffee Marketing Agency; and Embu Coffee Farmers Marketing Agency Limited.
Others include Kinya Coffee Marketing Agency Limited; Alliance Berries Limited; Bungoma Union Marketing Agency Limited; New Kenya Planters Co-operative Union PLC (New KPCU); KCCE Marketing Agency Limited; Meru South Coffee Marketing Company Limited; and Baringo Kawa Brokerage Company Limited.
Licensing of coffee brokerage firms comes at a time when the coffee sector in the country is undergoing reforms aimed at restoring profitability to coffee farmers who, according to the government, have long suffered under the hands of unscrupulous middlemen.
It is these coffee reforms that brought the CMA to the heart of the coffee value chain with the authority given mandate to regulate activities at the Nairobi Coffee Exchange, which is the primary coffee trading platform in Kenya.
“The momentum of the reform agenda needs to be sustained to ensure full implementation of the Capital Markets (Coffee Exchange) Regulations,” said Wyckliffe Shamiah, CMA Chief executive officer on Tuesday when issuing the brokerage license.
“This is expected to ensure the marketing and trading mechanism at the Nairobi Coffee Exchange (NSE) promotes fair trade, is transparent, and enhances price discovery, ultimately benefiting the coffee farmers.”
According to Simon Chelugui, Cabinet Secretary for the Cooperatives & Micro, Small and Medium Enterprises (MSME) Development, the NSE activities were moved to CMA as a result of growing worries that the auction board was dominated by marketers, leaving it susceptible to price rigging.
Following the coffee reforms, the CMA has been given authority to issue licenses to marketers and merchants at the NCE, a duty that was previously handled by the Agriculture and Food Authority (AFA).
Prior to the Coffee reforms, farmers initially received their sale money from the NSE, which was managed by brokers and required that farmers’ earnings be processed by many players before they could access it.
By implementing the new reform, NCE management will be forced to create a board and set up a new payment system that would enable farmers to directly access their proceeds through the Direct Settlement System (DSS).
The Co-operative Bank of Kenya has already been identified as the DSS provider of choice and will be tasked with expediting settlement of coffee sale proceeds.