KENYA – The Nairobi Coffee Exchange (NCE) is set to fall under the supervision of the Capital Markets Authority as part of reforms aimed at improving farmer incomes and bringing transparency to coffee trading.
This development sheds light on a protracted controversy regarding the ultimate authority between the Coffee Directorate and the CMA concerning the operations of the NCE.
Kenya’s coffee reform agenda, including the transition of the NCE to a new body called The Coffee Exchange, aims to establish a coffee marketing and trading mechanism that fosters fair, transparent trading activities.
The objective is to enhance price discovery and deliver substantial benefits to coffee farmers.
The 2016 review of the Capital Markets Act explicitly granted the CMA the mandate to regulate spot commodity markets, including the coffee commodity market in Kenya.
Section 11(3) of the Capital Markets Act empowers the CMA to regulate structured spot commodity markets, particularly the coffee commodity market.
The transition process will be overseen by a task force appointed by the Cabinet Secretary for Co-operatives and Micro, Small, and Medium-sized Enterprises, Hon Simon Chelugui. Once completed, the CMA will become the regulatory authority for The Coffee Exchange.
The task force, operating for 12 months until December 7, 2024, with the possibility of extension if necessary, will manage the transition, ensuring a smooth shift from the NCE to The Coffee Exchange.
A dedicated Secretariat has been established to provide background briefing, policy interpretation, program development, and implementation.
In 2023, as part of its commitment to coffee sub-sector reforms, the CMA licensed Kirinyaga Slopes Coffee Brokerage Company Limited as a coffee broker, bringing the total number of licensed coffee brokers to 14. This move reflects the CMA’s efforts to deepen and strengthen the coffee industry.
Established in 1989, the Capital Markets Authority plays a crucial role in both regulating and developing orderly, fair, and efficient capital markets in Kenya, aiming to promote market integrity and investor confidence.
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