Kenya eyes software to boost coffee marketing

Kenya is among three African countries that are eyeing a software developed by the Ethiopian Commodity Exchange (ECX) to market and sell agricultural products through an internet portal.

Others are Zimbabwe and Tanzania who have hailed the tool that can improve farmer’s earnings, ECX chief executive Dr Eleni Gadri-Madhini said at the seventh African Fine Coffee Conference and Exhibition held in Mombasa last week.

Once adopted, farmers will have increased access to market information and be able to trade coffee directly.

Farmers in most of the coffee producing countries use agents to access the markets.

For instance, Kenya is using the central auction system conducted weekly. 

This is a market where coffee is bought by licensed dealers through competitive bidding. 

The direct sale, commonly referred to as the “Second Window” requires a marketing agent to negotiate with a buyer outside the country and a sale contract registered with the Board.

The two systems leave the farmer with little information on the dynamics of the market, which according to Etienne Delbar, a stakeholder in the industry, leads to a decline in the performance of the sector in many parts of Africa.

ECX system is the first of its kind in Africa, which once adopted by African coffee producers will increase the global market share that stands at 10 per cent to more than twice, experts said.

The software serves farmers, traders, processors, exporters and consumers.

It provides a secure and reliable system of handling, grading, and storing commodities, matching offers and bids for commodity transactions, and a risk-free payment and goods delivery system.

One of the key successes of the ECX was to kick brokers out of the marketing chain.

And although they opposed the $24 million project when it was started 18 months ago, according to Ms Gadri-Madhini, those who reinvented themselves are today some of the main beneficiaries.

“The brokers had taken advantage of the insufficiencies that existed in the marketing chain but have since adjusted the way they do business,” she said.

And farmers, she said, were now able to access international markets directly and are no longer restricted to local markets as the ECX provides them the scope of forward contracting.