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Co-op societies take coffee trade wars to House

By Dominic Omondi | September 2nd 2021

Murang’a Woman Representative Sabina Chege. [File, Standard]

The fight for control of Kenya’s coffee trade has found its way to the National Assembly after five co-operative societies petitioned lawmakers to be allowed into the market.

Yesterday, five officials of the newly licensed brokerage firms owned by smallholder coffee societies handed their petition to Murang’a Woman Representative Sabina Chege seeking to compel the Nairobi Coffee Exchange (NCE) to admit them.

“Received a petition from representatives of Murang’a, Machackos, Kipkelion, Mount Elgon, Meru coffee unions under the National Coffee Federation of Kenya who have been granted coffee broker licences by Capital Markets Authority as per the Capital Markets (Coffee Exchange) Regulations, 2020,” said Ms Chege in a Twitter post. “NCE must admit the duly licensed brokerage firms with immediate effect in compliance with the law,” read part of the petition.

The co-operatives asked NCE to immediately appoint a provider of the Direct Settlement System (DSS), a banking facility provided by commercial banks for clearing and settlement of coffee sales in an auction.

They also want a legal notice issued by National Treasury Cabinet Secretary Ukur Yatani to amend the Coffee General Regulations to reinstate or extend marketing agents’ licences from July1, 2021 to June 30, 2022, declared unlawful as it was not subjected to public participation and not approved by the National Assembly and Senate.

The petition also called for cancellation of marketing licenses issued under the revoked Coffee (General) Rules 2002 or any legal notice extending their operation.

The five companies were United Eastern Kenya Coffee Marketing Company, Meru County Coffee Marketing Agency Ltd, Kipkelion Brokerage Company Ltd, Mt Elgon Coffee Marketing Agency and Muranga County Coffee Dealers Ltd.

Their appeal to parliament is the latest attempt to break into the coffee trading business, which has been dominated by marketing agents, often times at the expense of farmers.

The companies noted that there is a new legal framework which abolished the marketing agents licence, providing for a coffee broker to carry out the coffee marketing function.


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