In Kenya, the coffee industry is supported by a well-regulated structure that includes various players facilitating the smooth operation of the coffee trade. One of the key players in this system is the coffee broker. As defined by the Capital Markets (Coffee Exchange) Regulations of 2020, a broker is a person cleared by the exchange and licensed by the Capital Markets Authority (CMA). These brokers are appointed by coffee growers or their associations to sell coffee on their behalf through the Nairobi Coffee Exchange (NCE), which acts as the primary marketplace for coffee in Kenya.
Coffee brokers serve an essential role in the trading ecosystem. They act as intermediaries between coffee growers and the marketplace, ensuring that farmers’ coffee is presented for trading in a manner that meets the exchange’s requirements. Their role is crucial in managing the logistics of the coffee trade, including preparing, processing, and presenting the coffee at the exchange. Brokers also provide market insights and expertise to growers, helping them navigate the sometimes volatile coffee markets.
The NCE is a key platform where coffee brokers and buyers meet. The brokers facilitate the sale of coffee by ensuring that the farmers’ produce meets the standards required for trade, and they assist with the entire sale process, which includes handling the coffee from the farms to the marketplace. These brokers can be privately owned or work under the umbrella of farmer unions, providing the flexibility for different types of growers to access the market.
As of the 2024/2025 coffee season, the brokerage industry in Kenya remains competitive, with 15 licensed brokers actively operating. The market dynamics are fluid, with these brokers continually adjusting their strategies to handle shifting volumes and changing market conditions. The 2024/2025 season has seen consistent participation from brokers, with some brokers increasing their market share compared to the previous season.
The top brokers in Kenya for the 2024/2025 season include firms such as Alliance Berries, New KPCU, Kirinyaga Slopes Brokerage Company, KCCE-MA, and Kipkelion. Alliance Berries has been one of the standout performers, managing a significant portion of the total market volume. In the 2023/2024 season, the firm handled 27% of the total volumes, and by the 19th sale of the current season, it has already managed 41% of the total volumes. This indicates a significant increase in its market share, highlighting its strong position in the market.
Similarly, New KPCU, one of the largest and most established brokers, accounted for 19% of the total volumes in the 2023/2024 season but has seen a decline in market share during the current season, handling only 13% of the volumes up to Sale 19. This change could be indicative of shifting dynamics within the market, as competition increases and other brokers gain ground.
Kirinyaga Slopes Brokerage Company was another significant player, managing 18% of the total volumes in the previous season. This year, however, the company has seen a decline in its market share, now handling 12% of the volumes up to Sale 19. Despite this decrease, the company remains one of the top five brokers, continuing to play a crucial role in the Kenyan coffee sector.
KCCE-MA, on the other hand, has shown improvement in its performance. While it accounted for only 7% of the volumes in the 2023/2024 season, it has increased its share to 9% in the current season, indicating its growing influence within the coffee brokerage market. Similarly, Kipkelion has also seen an increase in its market share, rising from 6% in the 2023/2024 season to 8% up to Sale 19 this season.
The market remains fluid, and brokers must continuously adapt to the challenges of fluctuating coffee prices, changing buyer preferences, and other external factors such as climate conditions and international market trends. However, the Kenyan coffee sector is poised to continue thriving with a vibrant brokerage industry supporting the growth and stability of coffee production and trade.
In conclusion, coffee brokers are vital to the smooth functioning of the Nairobi Coffee Exchange and the Kenyan coffee industry at large. They not only facilitate the trade of coffee but also provide essential services to farmers, helping them optimize their earnings from coffee production. As the 2024/2025 season progresses, brokers will continue to play a critical role in ensuring that the Kenyan coffee industry remains competitive and successful on the global stage.
