Market News

CMA licenses two new coffee brokers

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Capital Markets Authority (CMA) CEO Wyckliffe Shamiah on April 29, 2021. PHOTO | LUCY WANJIRU | NMG

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Summary

  • The CMA has issued full license to Mt Elgon Coffee Marketing Agency Limited and United Eastern Kenya Coffee Marketing Company Limited in line with the Capital Markets (Coffee Exchange) Regulations, 2020.
  • This now brings to five the number of coffee marketers that have fully been licensed to trade under the new regulations at the Nairobi Coffee Exchange (NCE).

The Capital Markets Authority (CMA) has granted full licenses to two more coffee brokers even as the ones that were approved last year are yet to be allowed to trade at the auction.

The CMA has issued full license to Mt Elgon Coffee Marketing Agency Limited and United Eastern Kenya Coffee Marketing Company Limited in line with the Capital Markets (Coffee Exchange) Regulations, 2020.

This now brings to five the number of coffee marketers that have fully been licensed to trade under the new regulations at the Nairobi Coffee Exchange (NCE).

CMA Chief Executive Officer, Wyckliffe Shamiah said the regulator continues to engage relevant stakeholders in the coffee sub-sector to ensure that the momentum of the reform agenda is sustained and gains traction towards full implementation of the regulations.

Mr Shamiah also said the current bank guarantee held by brokers will continue until the Nairobi Coffee Exchange appoints a bank that will offer the Direct Settlement System (DSS) in line with provisions of the regulations.

Lack of DSS is one of the reasons why the implementation of the new coffee regulations has delayed to kick off a year since they were adopted.

“The current bank guarantees by the different players shall continue in operation pending competitive selection of a commercial bank by the Nairobi Coffee Exchange,” said Mr Shamiah.

He said the new regulation will ensure the marketing and trading mechanism at the NCE promotes fair trade, is transparent and enhances price discovery that will ultimately benefit farmers who will receive coffee sale proceeds efficiently once the settlement system is in place.

The NCE last year declined to admit the millers that had been licensed at the auction, pointing out that it was seeking an advisory opinion from the government after the old trading regulations were extended to July 2022.

The regulations, which were gazetted last year, gave the CMA the mandate to licence the coffee exchange and brokers.

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

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