Reforms boost market access, earnings for coffee farmers

Coffee market stakeholders say there has been significant improvement in the commodity's trading since the reopening of Nairobi Coffee Exchange (NCE) in August last year.

The NCE had been briefly suspended to allow for reforms aimed at boosting the incomes for coffee farmers.

Under the new guidelines, farmers were allowed to sell their coffee directly through the auction, a move which the government hoped would cut out brokers, previously accused of pocketing profits instead of farmers.

The auction is now supervised by the Capital Markets Authority (CMA) as part of the new measures aimed at increasing transparency.

NCE chairman Patrick Gitonga said these changes have borne fruit and the exchange has traded $203 million dollars (Sh26 billion) since the auction reopened.  

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“The average price for October 2024 was $254.07 (Sh33,000) per 50kg bag, which signifies an upsurge in both local and international prices where Arabica coffee is benchmarked,” he said.

"These incremental gains, though modest, represent a significant step forward in ensuring that farmers receive better returns."

Gitonga was speaking at the NCE during a market linkage event with a cupping session in partnership with Solidaridad and Fairtrade Africa.

He said NCE will continue expanding and refining its digital capabilities, ensuring that it remains an adaptable and forward-thinking institution.

“We will continue to enhance the integration of digital platforms, improving both accessibility and transparency for all stakeholders.”

He acknowledged the critical role of CMA as the principal regulator of NCE.

“The CMA’s involvement ensures that the price discovery process remains transparent, predictable, and accessible.

"It also fosters confidence among buyers, who value transparency and fairness in the markets they engage with,” he said.

The chairman said the restructuring of the NCE was a fundamental reimagining of how agriculture markets should operate that prioritizes transparency, fairness, and empowerment of farmers.

He said the licensing of coffee co-operatives to sell directly at the NCE in 2023 marked a significant departure from the previous structure that often involved multiple intermediaries.

“This change reflects our commitment to empowering coffee farmers by ensuring that they can access the global market directly and benefit more equitably from the value their coffee generates,” he said.

NCE chief executive Lisper Ndungu said Kenya’s coffee sector is more than just an economic contributor; it is a heritage, a culture and a lifeline for millions.

“Our growers, who nurture every bean with care and expertise, are the heartbeat of this sector.

"However, they face growing challenges, from market volatility and limited access to global buyers, to inadequate support systems and changing climate patterns and the greatest concern so far has been the EUDR,” she said.

Ndung'u emphasised that their focus remains firmly on enabling coffee growers to thrive in a competitive global market.

“By fostering transparency, promoting value addition and enhancing farmer empowerment, we can unlock the full potential of Kenyan coffee and secure its place as a global leader in quality and sustainability.”

The CEO highlighted the implementation of the Coffee General Regulations 2019 and Capital Markets Coffee Exchange regulations 2020, which provide growers with more autonomy in their trades.

“These reforms are a vital opportunity for our growers to make more informed decisions about their futures.”