Kiambu Coffee Marketing Company Ltd Gains Approval Amid Sector Reforms

Reforms in Kenyan troubled coffee sector gained renewed momentum with a significant development in January: the Capital Markets Authority (CMA) approved four new coffee brokers to trade at the Nairobi Coffee Exchange (NCE)—among them, Kiambu Coffee Marketing Company Ltd. This approval brings the total number of licensed brokers to ten, marking a milestone in efforts to improve transparency and earnings for coffee farmers. Kiambu Coffee Marketing Company Ltd will now represent coffee farmers, particularly from Kiambu County, at the NCE. This move is expected to empower local cooperatives and ensure that farmers benefit more directly from auction sales, which account for up to 95% of all coffee transactions in Kenya. The inclusion of Kiambu Coffee Marketing Company Ltd comes at a crucial time. Farmer groups have long decried manipulation and collusion in the auction system, which they blame for falling coffee prices. For instance, the price of top-grade Kenya AA coffee plummeted to around US$200 per 50kg in December, down from US$400 in January 2022. The Capital Markets Authority took over regulation of coffee exchange operations in 2020, replacing the Agriculture and Food Authority’s Coffee Directorate. This shift aimed to instill efficiency and transparency through the Capital Markets (Coffee Exchange) Regulations. These rules include licensing procedures for brokers like Kiambu Coffee Marketing Company Ltd and mandate the creation of a Direct Settlement System—a mechanism intended to speed up and clarify payments to cooperatives and farmers. Previously, only six brokers had been approved under these regulations. The addition of Kiambu Coffee Marketing Company Ltd, along with Kinya Coffee Marketing Agency Ltd, Bungoma Union Marketing Agency Ltd, and Meru South Coffee Marketing Company Ltd, underscores the expanding participation of farmer-focused organizations in the reformed system. Although auctions dominate the market, about 5–15% of Kenyan coffee is sold through “second window” direct sales. In this arrangement, cooperatives—including those that may now work with Kiambu Coffee Marketing Company Ltd—can negotiate directly with international buyers, bypassing the auction. As part of the ongoing transition, the CMA extended the Nairobi Coffee Exchange’s operating license to April 30, 2023, giving the Exchange more time to fully comply with new regulatory requirements. The revitalisation of the sector—anchored by reforms and the participation of new brokers like Kiambu Coffee Marketing Company Ltd—comes at a critical juncture. Kenya’s coffee production has dwindled significantly, falling from 129,000 metric tons in 1983/84 to under 40,000 metric tons by 2020, driven by low prices and farmer disengagement. The approval of new brokers aims to reverse this trend by ensuring better market access and fairer returns for farmers.