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Confusion looms as Nairobi coffee auction reopens

Coffee berries being sorted at a farm in Tetu, Nyeri. [Kibata Kihu, Standard]

The resumption of operations of the Nairobi Coffee Exchange (NCE) will be full of challenges after some major millers and marketers opted not to participate in the auction.

The re-opening of the NCE on August 15, as ordered by its Chief Executive Risper Ndung'u, will have only 2,705 bags of coffee in sale number 30.

In the past, the platform had the capacity to handle between 7,000 bags and 10,000 bags weekly, the majority destined for the international market.

Insiders reveal that most of the coffee cooperatives are withholding their produce in the warehouses following the confusion on the implementation of the coffee regulations.

There are more than 60 marketers, with the majority having been denied operating licences by the government under the new regulations to perfect the coffee value chain.

Coffee estates are in a dilemma as they will not participate in the auction since millers contracted are not licensed by county governments in the coffee belt. "Most people are holding coffee due to the existing confusion. Nobody clearly understands when the next directive will come," said a miller.

"Thousands of the coffee bags are in the stores of the millers and marketers based on loans extended to the cooperative societies to facilitate production and operations."

The Standard has learned that Meru Cooperative Union, in the Tuesday auction, will bring 2,000 bags, the largest supply from the growers as demanded by the coffee regulations.

In sale number 30, where major dealers inject millions of shillings, they have shied away owing to the State's operationalisation of the Coffee Regulation on August 1.

An insider in the coffee market divulged that Kipkelion Brokers Ltd will bring 198 bags, United Eastern Kenya Coffee Marketing 306, and Murang'a County Coffee dealers 201 bags. Others like Mt Elgon, Bungoma, Embu, Kinya Coffee, Baringo Kawa, Meru South, and Alliance Berries, will not place any coffee in the market.

"In the normal sales, the players bring in more than 10,000 bags of coffee, and these 2,700 bags are out of place," said the source.

A week ago, Murang'a leaders led by Francis Ngone of Murang'a Farmers Union, County Executive Members Prof Kamau Kirangai (Agriculture), and Kimani Mugo (Trade and Cooperative) moved to mobilise the cooperative societies to deliver their coffee through Murang'a County Mills.

Ngone said the farmers' leadership was lobbied to market their coffee through county coffee dealers to avoid the private entities.

National Coffee Union Chief Executive Lucy Muruba said farmers in Nyeri, Kirinygaga, and Nakuru are waiting to participate in the auction platform.

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