Coffee auction confusion as lawmakers back CMA

Coffee beans

Coffee beans on display for auction at the Nairobi Coffee Exchange (NCE) at the Kenya Planters Cooperative Union (KPCU) along Haile Selassie Avenue.

Photo credit: File | Nation Media Group

Coffee marketing has been thrown into fresh confusion after a parliamentary committee threw out regulations introduced by Agriculture Cabinet secretary Peter Munya in July that mandated the Agriculture and Food Authority (AFA) to oversee operations of the Nairobi Coffee Exchange (NCE).

The Committee on Delegated Legislation, in response to a petition by four coffee brokerage firms, last week ruled that Mr Munya disregarded the Constitution when he published new regulations that barred brokers licensed under the Capital Markets Act from marketing farmers’ produce.

The Capital Markets (Coffee Exchange) Regulations 2020, which were gazetted in April last year, gave the Capital Markets Authority (CMA) the mandate to licence the coffee exchange and brokers.

Mr Munya has, however, opposed the role of markets regulator in the coffee auction, saying it be done by the AFA.

Following the committee’s decision, the brokers including the United Eastern Kenya Coffee Marketing Company, Kipkelion Brokerage Company Limited, Mt Elgon Coffee Marketing Agency Limited, Meru County Coffee Marketing Agency, and Murang’a County Coffee Dealers Company now want the NCE to issue them with rights to participate in the weekly auction at the Nairobi Coffee Exchange.

The NCE has locked out the five brokers from the auction citing an advisory from the Agriculture ministry, which is opposed to having the CMA oversee the auction.

“We are looking forward to getting a positive response from you as this will enable us realise and enjoy the fruits of coffee reforms through marketing our coffee as coffee farmers,” said Elizabeth Nzilani, chief executive at United Eastern Kenya Marketing Company yesterday in a letter to NCE chief executive Daniel Mbithi.

The brokers urged the NCE to disregard a legal notice Mr Munya issued in July that sought to extend the old marketing licences for another year and amend the Coffee General (Amendment) Regulations 2021.

Mr Mbithi on Wednesday declined to comment on the demands by the brokers saying “the matter was already in court”.

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