NAIROBI, Kenya, April 12 – Coffee producers are on the verge of getting better prices for their products as the Capital Markets Authority regulates trade in commodities.
This follows the publication in the Official Journal of Finance and Planning, Ukur Yatani, on April 3, 2020, of the 2020 regulation on the capital markets (commodity markets) and the 2020 regulation on the capital markets ( coffee market).
The Capital Markets (Commodity Markets) Regulations 2020 will facilitate the licensing of commodity exchanges and commodity brokers and the authorization of clearing houses. The regulations also provide for the governance, trading and business conduct of commodity exchanges and commodity brokers, including disclosure, compliance and reporting requirements.
Confirming the new development, the interim chief executive officer of the Capital Markets Authority (CMA), Wyckliffe Shamiah, said, “The regulations were developed after a full consultation process, including: a benchmarking with the
jurisdictions; review by consultants mandated by the State Department for Trade and the Capital Markets Authority (CMA), as well as broad stakeholder engagement at the county, national and parliamentary levels. ”
“In order to meet the historical challenges and those linked to the market structure in the coffee subsector, the Committee for the implementation of reforms in the coffee subsector (SCCI), of which CMA is a member, has drawn up the 2020 Regulation. on the capital markets (Coffee Exchange) for the sector in order to strengthen it. successful reform initiatives for the Coffee Exchange embedded in a legal framework, ”said Shamiah.
The 2020 regulation on the capital markets (coffee market) provides for: incorporation of the coffee market; accreditation of brokers; establishment and operationalization of a direct settlement system for rapid and transparent payment of the proceeds from coffee sales; conducting trade in a safe, stable and transparent manner in an environment of fair competition; and protection of
the interests of the producer, buyer and other stakeholders during an exchange.
“The need to develop structured mechanisms for commodity trade in Kenya is supported by the recognition that smallholder farmers face several challenges due to market inefficiency manifesting itself in the form of insufficient supply chain, limited access to credit, ineffective price discovery, volatility and poor market access resulting in high production and marketing costs.
“It is widely recognized that strategies to increase food production and security will be in vain unless accompanied by an efficient and robust commodity storage and trade system,” said the statement. of the CMA published following publication in the Official Journal.
Shamiah noted that the publication of the Commodity Markets Regulations is aligned with the objective of the Capital Markets Master Plan (2014-2023) to position the Kenyan capital market as a center of excellence on spot commodity markets in agriculture, energy, minerals and metals supported by national commodity exchanges to stimulate development and
“This is also in line with the Big 4 program on initiatives to improve food security and nutrition in the country,” he concluded.
The CMA statement said, “The development of structured commodity trade should provide a transparent, efficient and structured trading system, quality assurance for commodities, effective price discovery and, in the long run, will facilitate better export competitiveness of Kenyan commodities.
“This should boost domestic value added and processing, while improving the country’s food security and developing other value chains for non-agricultural products,” the statement said.
The capital markets law was amended in 2016 to broaden its mandate to regulate spot exchanges. The Authority, in consultation with the National Task Force on the Creation of a Commodity Exchange in Kenya and Reforms in the Coffee Sector
The Implementation Committee (CSIC) developed the Commodity Markets and Coffee Trade Regulations to support the creation of structured commodity trade in Kenya.