- Direct exports to weed out predatory brokers
- The cooperative union appealed to the Nairobi Coffee Exchange to give it access to the local auction.
Image: John Kamau
Kipkelion Coffee Co-operative Society becomes the first farmer's group to directly export grains without going through brokers.
This is part of the ongoing reforms in the sector to ensure farmers maximise their profits. The farmers union flagged off seven-grain containers to South Africa.
The export deal arrived in July last year during the Coffee Expo held in Seoul that saw a number of farmers drawn from several coffee cooperatives interact directly with South Korean importers.
Speaking at the flagging off ceremony at Bolloré Africa offices in Nairobi, chief guest, Kericho Governor Paul Chepkwony termed the move as a defining moment for coffee farmers in Kenya.
"The power to earn is now wholly in farmers' hands. The market liberalisation will cushion farmers who labor the most from predatory brokers,'' Chepkwony said.
He thanked President Uhuru Kenyatta for facilitating the implementation of farmer-centric coffee reforms that have vested the proprietary interest over coffee to the farmers.
"We now wish to boldly state that history is on the side of coffee farmers,'' Kipkelion Brokerage Company Limited which is fully owned by coffee farmers to market their own coffee said in a statement.
The cooperative union appealed to the Nairobi Coffee Exchange to give it access to the local auction.
The Capital Markets (Coffee Exchange) Regulations, 2020 allows coffee farmers to own brokerage firms to directly sell their harvest. Initially, farmers were forced to go through independent brokers.
The farmers union thanked the Ministry of Trade and Kenyan envoy in South Korea Ambassador Mwende Mwinzi for facilitating participation at the Expo in South Korea where it met buyers.
Last year, Kenya renewed the cordial bilateral relations with South Korea after a three year-standoff, facilitating for negotiation of tariffs reduction, especially on coffee
The pact is a major boost to trade between the two countries which is currently in favour of South Korea.
The government's data shows the value of trade increased from Sh8.47 billion in 2008 to Sh22.82 billion in 2020, a 169.42 per cent growth in 13 years.
The balance of trade has favoured South Korea standing at about Sh18.1 billion in 2020.
The news of first direct sales to the international market by farmers is coming just a day after CMA granted full licenses to two more coffee brokers even as the ones that were approved last year are yet to be allowed to trade at the auction.
Yesterday, CMA issued a full license to Mt Elgon Coffee Marketing Agency Limited and United Eastern Kenya Coffee Marketing Company Limited in line with the Capital Markets (Coffee Exchange) Regulations, 2020.
This now brings to five the number of coffee marketers that have fully been licensed to trade under the new regulations at the NSE.