CMA directs auction to admit new coffee millers, downplays Munya nod

The Capital Markets Authority (CMA) has directed the Nairobi Coffee Exchange (NCE) to admit the newly licensed millers to the trading floor, dismissing the exchange’s stance that it must await approval from the Ministry of Agriculture to do so.

In a letter to NCE chief executive officer Daniel Mbithi, the CMA has directed that the five millers be admitted at the auction with the issuance of lots range and brokers code, which is mandatory before one is allowed to trade.

The NCE last week declined to admit the five millers at the auction, pointing out that it was seeking advisory from the ministry after the old trading regulations were extended to July 2022.

“In order to facilitate seamless coffee auction commencing September 7, 2021, the CMA hereby directs you to grant the aforementioned entities admission to the trading floor in line with the Regulation 33 (1) of the Coffee Exchange Regulations, 2020 ahead of their scheduled participation,” said CMA chief executive Wycliffe Shamiah.

Mr Mbithi had said that the NCE is waiting for guidance from the ministry before taking any action, illustrating the dilemma facing the exchange in the ongoing dispute between the CMA and the ministry over who has the right to regulate coffee trading.

On July 1, the CMA granted Meru County Coffee Marketing Agency Ltd a full coffee broker licence, while Kipkelion Brokerage Company Ltd, Murang’a County Coffee Dealers Company, Mt Elgon Coffee Marketing Agency Ltd and United Eastern Kenya Coffee Marketing Company Ltd were issued with conditional licences.

The capital markets regulator argues that the five brokers obtained letters of clearance from NCE as part of the documents required (by the CMA) during their licence application process, making them eligible to participate in the coffee auction.

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

However, Agriculture Cabinet secretary Peter Munya has opposed the role of CMA in the coffee auction, saying it be done by the Agriculture and Food Authority.