Inside Politics

Nairobi Coffee Exchange debars brokers at auction sale

Wednesday, August 25th, 2021 00:00 |
Agriculture CS Peter Munya. Photo/File

Supremacy wars over the sale and amrketing of coffee deepened after the Nairobi Coffee Exchange (NCE) secretariat denied recently licensed brokers access to the auction for trade.

While rejecting the brokers who were recently authosirded to trade by the Capital Markets Authority (CMA), the NCE secretariat said it lacks the capacity to allow the companies to trade, unless it receives an affirmation from Agriculture Cabinet Secretary Peter Munya.

This even as NCE chief executive Daniel Mbithi said all the new brokers licensed by CMA have applied to be issued with lots range and brokers’ code, which are key requirements traders must fulfil before being allowed to trade at the auction.

“Pursuant to the legal notice No.104 issued on June 23, 2021 by the Cabinet Secretary Agriculture, Livestock, Fisheries and Co-operatives extending the validity of all marketing licenses until 30 June 2022, we are seeking advisory from the ministry on how to proceed with brokers licensed under the capital markets Act to ensure a smooth transition,” said Mbithi in a letter to the brokers.

Simmering row

These new development is expected to exacerbate a simmering row between the ministry of agriculture, marketing agents and CMA.

On July 1, 2021, CMA granted Meru County Coffee Marketing Agency Ltd a full coffee broker licence after fulfilling the stipulated conditions though the company is trading under the old license.

At the same time the stock markets regulator awarded conditional licences to Kipkelion Brokerage Company Ltd, Murang’a County Coffee Dealers Company, Mt Elgon Coffee Marketing Agency Ltd and United Eastern Kenya Coffee Marketing Company Ltd.

Companies with conditional licences are expected to come into full compliance with the requirements of the Coffee Exchange Regulations within the next three months from July 1, 2021.

The brokers are supposed to start trading at the auction under the new marketing regime, but the same is facing challenges as the ministry of agriculture and CMA, are embroiled in supremacy wars.

Coffee marketing was supposed to be under the supervision of the CMA starting July 1, 2021 under the Capital Markets (Coffee Exchange), Regulations 2020.

The role of coffee marketing agents was supposed to end on June 30, 2021 and usher in coffee brokers as the new value chains.

Regulating coffee mart

However, Agriculture Cabinet Secretary Peter Munya extended the old licences for another year and at the same time issued a notice to amend the Coffee General (Amendment) Regulations 2021.

The Attorney General in a letter dated July 2, 2021 advised the CS to involve other stakeholders in the value chain to amend the regulations through public participation.

The minister was expected to have presented the amendments  seven days from the date of the letter publication.

Munya dismissed the new regulations and the role of  CMA, saying the latter’s main work is to regulate securities, urging the regulator to desist interfering with coffee market.

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