Coffee farmers count losses as sale stalls


A coffee farmer in Nyeri. FILE PHOTO | NMG

Farmers have incurred heavy losses after the Nairobi Coffee Exchange (NCE) postponed the auction for a second time in a row after the Ministry of Agriculture failed to gazette a notice extending the current regulations.

The Nairobi Coffee Exchange (NCE) said it could not conduct the auction yesterday because the gazette notice that extends the regulations, which were to expire in June, has not been published.

“As farmers, we already have existing contracts with marketing agents, and we have released our coffee to them for sale. The delay in selling coffee means increased economic loss to the farmer,” said Kenya Coffee Producers Association (KCPA) chairman Peter Gikonyo.

The Ministry of Agriculture had said it would gazette the regulations last week, but this was not done. Coffee marketers have refused to trade under the guidelines issued by the Capital Markets Authority (CMA) last week extending the trading rules under the Crops Act.

“Marketers are waiting for a gazette notice before they can participate at the auction,” said NCE Tuesday.

Agriculture Cabinet Secretary Peter Munya gave an assurance last week that he would gazette his own notice after rejecting the CMA guidelines, arguing that they lack clarity.

“I signed a Kenya gazette on the extension of the trading licences and a three-month extension of NCE management committee,” said Mr Munya last week.

The CMA told the Business Daily that the marketing agents association said it appears there are licensing issues that need to be addressed.

“CMA is engaging all stakeholders in the coffee value chain to ensure the auction resumes as soon as possible,” said the regulator.

Suspension of the trading has also cause buyers who had contracts with overseas customers to make losses as some of them have seen their orders cancelled for not meeting their part of the bargain within the stated time.

“We have traders whose orders have been impacted negatively by the delays in opening the auction. This means that some of our customers would opt to buy coffee from other parts of the world if we do not resume soon,” NCE said.

Kenya sells over 95 percent of its coffee to the world market with the bulk of it passing through the auction. About 10 percent finds its way to overseas buyers through a direct market.