Fresh doubts emerge over the reopening of Nairobi’s Coffee Exchange

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The deadlock between the Kenya Coffee Producers and Trade Association (KCTPA) and the Commercial Coffee Millers and Marketing Agents Association (CCMMAA) shows no sign of abating as the KCTPA have made a move demanding that growers are further represented at the Nairobi Coffee Exchange, just hours before the auction is set to reopen tomorrow after cancellations put a hold to trading last week.

This move by the KCTPA is, as argued by their members, to ensure that farmers would receive higher returns in the export markets if their representatives were allowed to oversee deals.

‘No country or government should allow [the] sale of coffee at the exchange until farmers are well represented’ said the KCTPA‘s Head of Communication and Agribusiness Sylvestre K’Okoth, alluding to a presumed and growing influence of cartels and multinationals within the domestic market.

By introducing their own agents, which five counties have announced intentions to do, the theory is that middlemen will be removed, bringing about increased profits for farmers.

The stalemate has pitted the Commercial Coffee Millers and Marketing Agents Association (CCMMAA) against the KCTPA and local governments who preside over the main coffee growing locations in the African country.

Although Kenya is a comparatively small player on the global scene, its beans are sought after by many entities for use in the creation of blended coffee. The governors of the five regional counties involved stated that they wanted a complete overhaul of the pre-existing supply chain, but in response, the regulators have decreed that existing contracts are legally binding.

In their defence, CCMMAA Chairman James Mureithi did express fears in the current system and understood some of the mooted changes, but stated that there was an inherent lack of understanding concerning coffee production and the structures of trading. Mureithi also admitted that the CCMMAA would be in line to lose a substantial amount of money ‘if farmers repudiate milling and marketing contracts.’

With exports stagnating due to the wrangle and limitations being imposed on all sides, a breakthrough in the negotiations are needed if Kenya’s coffee industry is to get back on track in the near future.