The licenses for coffee traders have been extended by one year, with Nairobi Coffee Exchange management committee also getting a three-month extension.
Agriculture Cabinet Secretary Peter Munya faults the Capital Markets Authority’s recent move to extend coffee traders licenses that had expired last week, saying the directives lacked legal backing.
Munya says it is only his office that has the power to oversee operations of the coffee sector.
To this end Munya has gazetted extension of coffee traders by a year and the Nairobi Coffee Exchange management committee tenure by three more months.
At the center of the tussle between the Ministry of Agriculture and a section of coffee farmers on one hand against the Capital Markets Authority, is the Capital Markets (Coffee exchange), regulations 2020.
Kenya Coffee Producers Association called for suspension of implementation of the new coffee regulations until all structures and systems are put in place, faulting the recent suspension of this week’s auction noting that it had cost farmers.
He hinted that pricing systems could be reviewed to remove the minimum bags that can be purchased at the auction that is currently at 25 bags.
To enhance transparency, marketing agents are required to disclose the coffee volumes and prices for deals made at the coffee auction.
CMA said the extension was necessitated by delays in putting up a Direct Settlement System that is meant to facilitate payments for coffee sales.
The extension was in a move to give stakeholders more time to comply with the new Capital Markets Authority Act.
The Capital Markets (Coffee Exchange) Regulations, 2020, which were to be effected beginning this month, gives the CMA the mandate to license Coffee Exchange and the coffee brokers.
Acting Capital Markets Authority Chief Executive, Wyckliffe Shamiah attributes delays in setting up the direct settlement system to process payments to postponement in implementation of the new coffee regulations.
As such, coffee marketers are required to remit the funds to the cooperative societies as they have been doing under the General Coffee Regulations;.
Under the new coffee regulations, brokers, who will now be an equivalent of the marketing agencies in the previous regulations, are not required to deposit guarantee money with the regulator.