The Nairobi Coffee Exchange (NCE) is Kenya’s central marketplace for trading coffee produced in Kenya. The platform connects farmers, traders, and buyers countrywide. Nairobi Coffee Exchange represents a vital economic hub and a testament to Kenya’s rich agricultural heritage. So, what are the latest developments and functions of the Nairobi coffee exchange?
Every cup of Kenyan coffee tells a story of heritage, passion, and precision. Have you ever wondered how it gets from the farm to your cup? The Nairobi Coffee Exchange is where coffee beans are bought and sold in fast-paced auctions.
What is the Nairobi Coffee Exchange?
The NCE is the sole auctioneer of Kenyan coffee. It is managed by the Kenya Coffee Producers and Traders Association (KCPTA) and regulated by the Capital Markets Authority (CMA) and the Agriculture and Food Authority (AFA).
The Nairobi Coffee Exchange was founded in the early 1930s and has evolved into a modern trading platform. It ensures Kenyan coffee farmers experience a fair market value for their produce. However, the British colonisers from Ile Réunion introduced coffee to Kenya as early as 1893.
Consequently, the Coffee Board of Kenya (CBK) was established in 1931, and the first auction was held in 1935. Later, in 1963, Kenya gained independence and plantation land was nationalised and redistributed. During the same year, Kenya mandated weekly auctions to achieve economic growth through exports.
What are the functions of the Nairobi Coffee Exchange (NCE)?
The Nairobi Coffee Exchange (NCE) is the central platform for trading Kenyan coffee. It ensures fair prices and transparency in transactions. Basically, some of its key roles include:
- Auctioning: The NCE facilitates the sale of cash crops through a competitive auction system, ensuring farmers receive the best market prices.
- Connecting farmers with buyers: It provides a platform for farmers and cooperatives to meet local and international buyers, promoting global trade.
- Market price determination: The exchange plays a crucial role in setting the benchmark for prices in Kenya.
- Ensuring quality control: The NCE enforces strict quality standards by ensuring farmers only trade the highest grade.
- Providing market information: It offers insights and data on the crop’s prices, volumes, and trends, helping stakeholders make informed decisions.
Nairobi Coffee Exchange regulations
The NCE operates under strict regulations to ensure fairness and transparency. The Capital Markets Authority (CMA) enforces these regulations to maintain quality control and ethical trading practices.
Below are some of the regulations concerning licensing and registration provisions found in the Coffee Act, chapter 333.
No person shall:
- Buy, sell, mill, warehouse, export or otherwise deal in or transact any business in coffee unless he is a holder of a current licence issued by the Board for that purpose.
- Transport or have in his possession any coffee unless he is licensed to do any of the things specified in paragraph (a) and is the holder of a movement permit issued by the Board or is acting in the course of his employment as a servant or agent of a person holding such a permit.
This section shall not apply to:
- Any person who purchases coffee for consumption or for planting on his land
- Any grower who mills coffee produced by such grower
- Warehousing of coffee by the Kenya Railways Corporation or the Kenya Ports Authority.
- An auctioneer of coffee.
Nairobi Coffee Exchange CEO
The NCE’s CEO oversees the exchange’s daily operations and strategic directions. As of 2024, the current CEO is Lisper Ndung’u.
Recently, Lisper Ndung’u communicated to all principal users through a circular clarifying that all transactions will adhere strictly to the new rules. She said,
The exchange hereby wishes to notify the principal users of the trading floor that after the stakeholders’ engagements and review of the comments submitted by the stakeholders on the revised trading rules of the exchange, the CMA has approved the NCE Trading Rules 2024.
The CEO added,
Effective immediately, all trading activities at NCE will be conducted under these newly issued rules, which are grounded in the Crops (General) Regulations, 2019 and Capital Markets (Coffee Exchange) Regulations 2020.
What is the Nairobi Coffee Exchange Market Report?
The NCE market report is a critical tool for understanding trends in the Kenyan coffee sector. It provides detailed insights into recent auctions’ prices, volumes, and quality assessments.
Nairobi Coffee Exchange prices
The NCE prices fluctuate based on supply, demand, the quality of the crop, and global price trends. In addition, each auction sets the benchmark for local prices, influencing how much Kenyan farmers receive for their coffee beans.
For instance, per the 2023/2024 NCE August market report, the price of each 50 kg bag ranged between Ksh. 118 and Ksh. 322.
What are the dominant coffee brands in Kenya?
Kenya has several notable coffee brands showcasing rich flavours and unique bean profiles. Some of the notable brands in Kenya include:
- Fresh roasted Kenya Aa
- Kava noir Kenya Aa
- Dormans fine instant
- Fresh roasted
- Kenya Highlands
- Nescafe Classic
- Africafe
- Mac coffee original
- Café pele
What is the best grade of coffee in Kenya?
According to Expresso & Coffee Guide, Kenyan AA is considered the highest grade. This is because Kenyan AA’s large beans, vibrant acidity, and rich flavour make it an ideal choice.
What is the role of the Coffee Board of Kenya?
The Coffee Board of Kenya regulates and promotes the coffee industry. It performs the following duties:
- Sets policies
- Ensures quality control
- Oversees licensing
- To protect the interests of farmers, traders, and other stakeholders within the industry.
Why is coffee expensive in Kenya?
Coffee is expensive in Kenya due to several factors. Some of these include the high cost of production and high-quality standards required at the production level. Consequently, Kenya exports a significant portion of the cash crop, increasing local prices. The fluctuating global market trends and the intensive labour involved in cultivating them also contribute to their high cost.
With the above information, you now understand the Nairobi Coffee Exchange’s pivotal role in shaping Kenya’s coffee industry. Whether you are a coffee farmer or a coffee enthusiast, the NCE ensures that Kenyan coffee remains a symbol of quality and sustainability for years.
