Things start to look up at Nairobi Coffee Exchange as more cooperatives release produce for auction
KENYA – Activity is slowly starting to return to the Nairobi Coffee Exchange with more cooperatives releasing their produce for auction, a report by The Standard has revealed.
According to the report, a total of 11,432 bags of coffee weighing 703,516 kilograms were registered for auction on October 24, the highest number of bags received from brokerage firms since the new regulations were implemented on August 15.
The coffee categorized as 612 bags of AA, 164 PB bags, and 3,931 AB bags categorised as clean coffee came from 549 cooperatives and estates sourced by six marketers licensed by the Capital Markets Authority (CMA).
New Kenya Planters Cooperatives Union (NKPCU) led the group of six brokers, delivering 4,717 bags from 200 cooperative societies and estates.
It was followed by Kiambu Coffee Marketing with 1,666 bags sourced from 51 cooperatives and estates, while the privately owned Alliance Berries Ltd had 2,096 bags from 92 estates and cooperatives.
The recent change of events has given Auction Chairperson Peter Gikonyo optimism that normalcy may soon return at the auction which has been struggling to attract buyers since it reopened in August.
According to data from NCE, auction volumes for August dropped from 4,380 tonnes to 192 tonnes, representing a 95.62 per cent year on year decline.
Peter Kamoro, an expert in coffee marketing, said that Kenya has lost some international buyers who have relocated to Congo and Columbia to blend their coffee for export.
“The regulations were imposed to streamline the sector but have driven away some investors. That’s why only 25 per cent of the buyers are participating in the auction,” said Kamoro.
As activities at the auction take time to warm up, coffee farmers have been the most impacted as lack of sales denies them of much-needed income while increasing exposure of their produce to theft.
Coffee theft is not uncommon in the coffee industry with over 50 bags of coffee parchment worth Sh3 million at Gacugu Factory stolen in Embu West Sub-County in July.
Authorities responded by providing 57 coffee factories spread across the county with armed officers, especially at night, commensurate with the amount of stock in their stores.
The risk went a notch higher when many coffee factories were forced to withhold their produce due to inactivity at the auction but things are starting to shape up as more brokers get their license and trade resumes.
In October, Kirinyaga Slopes Coffee Brokerage Company Limited, a coffee broker promoted by the Kirinyaga County Cooperative Union, became the 13 brokers to be licensed by CMA to conduct coffee trading activities.
Ngutu Coffee Factory in Murang’a County, which had withheld more than 60,000 kgs is now marketing its produce through Alliance Berries Ltd.
Ngutu chairperson Evanson Mucheke said they anticipate better payment from the market. “We had to comply with the law and stop withholding the coffee. That’s why we have taken a section to the auction,” said Mr Mucheke.
