Kenya is on the verge of a historic overhaul of its coffee sector, setting the stage for the launch of its first ever global online coffee auction. The move is a direct assault on entrenched cartels and structural inefficiencies that have historically suppressed farmer earnings and export volumes.
This digitization of the Nairobi Coffee Exchange (NCE) is aimed at opening up real-time bidding to international buyers, delivering transparency.
The urgency for reform is underscored by recent data from the Kenya National Bureau of Statistics (KNBS), which highlights profound market instability. Coffee auction volumes at the NCE plunged sharply from 3.2 thousand metric tonnes in April 2025 to a mere 0.4 thousand tonnes in May, forcing a market recess in June.
While average prices saw a marginal rise from USD $6.37 to USD $6.97 per kilogram, the volatility damaged Kenya’s foreign exchange earnings. Export volumes slid from 4.6 thousand tonnes in June to 2.5 thousand tonnes in July, cutting national export earnings from Ksh. 4.5 billion to Ksh. 2.5 billion.
Agriculture and Cooperatives Cabinet Secretaries Mutahi Kagwe and Wycliffe Oparanya confirmed that preparations for the digital platform are in advanced stages.
“Marketing cannot be done the same way year after year and expect different results, it’s madness,” said CS Kagwe. “The auction must go online, allowing direct participation by international buyers. Cartels will no longer hold the market hostage. Technology will deliver transparency and better prices for our farmers.”
Despite a global surge in demand for specialty beans, Kenya’s coffee sector is underperforming. Last year, exports earned Ksh. 40 billion, nearly Ksh. 60 billion less than the sector’s peak in the late 1980s.
The online auction is part of a sweeping, multi-pronged reform agenda designed to reverse this decline. Key targets include:
- Cooperatives CS Oparanya outlined an ambitious plan to triple national coffee output from 50,000 to 150,000 metric tonnes within three years.
- The government is seeking to raise productivity from a low 3 kilograms to 30 kilograms per tree through a revitalization program and the deployment of more extension officers.
- The plan, led by New KPCU PLC, involves modernizing 1,176 cooperative factories across 22 counties.
Furthermore, a cornerstone of farmer protection is the Direct Settlement System (DSS), now fully operational and run by Co-operative Bank. The DSS guarantees farmers receive 80% of their proceeds directly, shielding them from exploitation by intermediaries. Over 200 cooperatives have already joined the system.
The reforms are being cemented through legislative action under the Cooperatives Bill and Coffee Bill 2024, which aim to tighten governance and strengthen farmer representation across the value chain.
Looking ahead, Kenya plans to leverage the global stage. Kagwe announced that Kenya will push for the creation of independent African coffee markets at the upcoming World Food Forum in Rome to strengthen the continent’s bargaining power and secure improved farm-gate prices for growers.