The Capital Markets Authority (CMA) has suffered a blow after the Ministry of Agriculture gazetted new coffee regulations, vesting the powers to regulate the auction of the commodity in the Agriculture and Food Authority (AFA).
The CMA and Agriculture Cabinet Secretary Peter Munya have been in a supremacy battle since 2020 when the new coffee regulations were meant to take effect.
Last month, Mr Munya gazetted the Crops Act (Coffee General Amended Regulations that now gives the mandate to license coffee millers and marketers to the Coffee Directorate, which is under AFA, sealing the fate of CMA as a regulator of spot commodities.
The Capital Markets (Coffee Exchange) Regulations 2020, which were gazetted in April 2019, had given the CMA the mandate to license the coffee exchange and brokers.
“The Authority (AFA) shall register all coffee warehousemen, warehouses, coffee miller-marketer, grower marketer, grower miller, auction organiser, coffee buyers, coffee bags suppliers, roasters, importers, and certification companies, maintain an up-to-date register and share the register with respective county governments,” said the minister in the gazette notice dated July 8.
This comes even as the CMA has extended the old regulations to the end of this year because of what it termed as “pending issues”, marking the third time that the Authority has prolonged the rules.
The Nairobi Coffee Exchange says it will go by the ministry directive. “We are under the Ministry of Agriculture and we are obligated to do as directed,” said NCE chief executive officer Daniel Mbithi.
CMA chief executive officer Wyckliffe Shamiah, in a letter sent to the Nairobi Coffee Exchange, says the regulations have been extended for lack of a Direct Settlement System and lack of approved trading rules.
“Please note that the above issues remained unresolved. However, in the spirit of supporting the much-needed coffee sub-sector reforms, the Authority hereby extends the in-principle approval granted to the Nairobi Coffee Exchange to December 31, 2022,” said Mr Shamiah.
The CMA has so far fully licensed five brokers to trade at the NCE between last year and now.
