Jay Sondhi

FROM PRINT ISSUE

During the year 2010, the Kenya Revenue Authority provided the facility for regional coffees transiting through Kenya to remain in Kenya for up to twelve months.

This facility is a result of the new Coffee Act in Kenya providing for regional coffees to be auctioned at the Nairobi Coffee Exchange (NCE).  Such coffees can also be sold privately outside the auction on an ex-warehouse Nairobi or ex-warehouse Mombasa basis between coffee producers and coffee exporters.

The inspiration for this development is the highly successful Mombasa tea auction, the largest tea auction in the world for export.  Although Kenya is a large tea producer, the addition of regional teas from East, Central and Southern Africa give the Mombasa tea auction the volumes, which make it the world’s leading auctioneer of export teas.

Although EAFCA has tried to bring the coffee producing counties of East, Central and Southern Africa together, the coffee industry in this region remains fragmented and has little cohesion.  Each producing country has its own approach to production, marketing and export of its coffee crop.

Importers and industry users located in coffee consuming countries who wish to buy coffees from various origins in the region have to travel extensively and maintain a large list of contacts to obtain and strengthen their connections to buy coffee.

A central auction system provides a forum where buyers gather.  This fosters a concentration of demand for coffees being auctioned.  This forum establishes transparent market prices, which are achieved and circulated to importers and industry users in consuming nations.

The example of the Mombasa tea auction demonstrates that international buyers are willing to focus their interest on a single venue to buy a given commodity. This convenient approach of sourcing a valuable commodity has created one of the world’s largest and most successful regional auctions.

With the addition of foreign coffees to its auction sale catalogues, the NCE will attract the focus of international buyers purchasing the regional coffees of East and Central Africa at a central auction.

A regional hub would also provide the logistical possibility for buyers to purchase small quantities of coffees of different origins and export these different coffees in a single container.  Today such a facility does not exist.

Over the years EAFCA has provided cohesion between regional coffee producing countries.  These many years of effort can crystallize into a regional hub for regional coffees to the benefit of coffee producers and coffee buyers overseas.

This concept is in the spirit of East African Community, now a reality!