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Automated tea auction will boost earnings, ensure transparency

MONEY & MARKET
By Patrick Beja | Apr 4th 2022 | 3 min read
By Patrick Beja | April 4th 2022
MONEY & MARKET

Tea pluckers at a farm in Bobaracho, Nyaribari Chache, Kisii County, 2021. [Sammy Omingo, Standard]

The Mombasa Tea Auction has been fully automated to boost efficiency and transparency.

East Africa Tea Trade Association (EATTA), which runs the auction said that the new Integrated Tea Trading System (iTTS) costs Sh230 million.

The automation was funded by the Danish International Development Agency (Danida) through Trade Mark East Africa, said EATTA chairman Arthur Sewe. Mr Sewe said automation of the auction will reduce the period in the tea trading cycle as well as direct costs associated with the auction process.

The iTTS project automated the manual processes along the tea value chain and stakeholders hope it will enhance tea volumes traded at the auction and productivity.

He said iTTS will ensure availability and access to tea trade data in a timely, reliable, accurate and verifiable manner.

“When fully implemented, iTTS will significantly reduce the need for physical presence or representation. It will simplify the tea trading process, reducing, among other things, the learning curve for new entrants into the tea sector and streamlining of processes,” Mr Sewe said.

He noted that automation will contribute to an increase in the income of farmers even in the event that prices remain constant.

Mr Sewe explained that the digital platform will enable tea packers to effectively participate in the auction and enhance the opportunities for marketing and selling value-added teas.

KTDA board chairman David Ichoho expressed hope that smallholder farmers will gain following the automation of the auction. [Sammy Omingo, Standard]

“iTTS will increase the volumes of tea sold at the auction. Transparency in the tea export process especially in price determination,” he said, adding that the system will increase participation in the tea trading process by the various actors.

He noted that the proposed development of a multi-hall auction will aid in improving the automation process and reduce the auction days from three to one or two.

Danish Embassy in Nairobi Counsellor Morgens Larsen pledged his country’s support for projects that would ease trade across borders. “The launch of the iTTS is particularly exciting because it helps position such a critical sector for future growth and success by driving efficiency and supporting both increased traceability and information exchange,” Mr Larsen said.

TMEA country programme director Farah Ahmed said the system will boost tea trade, and reduce trading time and cost of the transaction. “This system will improve governance, transparency and the volume of tea traded at the auction,” he said.

EATTA managing director Edward Mudibo noted that stakeholders at the auction will receive real-time information about the bourse.

“The platform will ensure that stakeholders of the tea auction, including farmers, buyers and sellers receive real-time information on what is happening on the auction bourse, which will boost confidence in the process,” he said.

Kenya Tea Development Agency (KTDA) board chairman David Ichoho expressed hope that smallholder farmers will gain following the automation of the auction.

“This system will go a long way in inspiring confidence in farmers. It will shorten the auction days and ensure transparency,” he said.

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