The Ministry of Agriculture will not renew the tea and coffee trading licenses if auctions fail to permanently move to online trading in two months.
“We have told them to move to the online platform, which will, among other things, help in price discovery mechanism because of the transparency that comes with this system. Failure to do so, we shall not renew their trading licenses,” said Peter Munya, the agricultural Cabinet Secretary.
He has directed the Mombasa tea auction and the Nairobi Coffee Exchange (NCE) to migrate to digital trading, arguing that the current disruption in trade caused by covid-19 would have been avoided if auctions had been automated.
Whereas the Mombasa tea auction is ready to go online within the stated time, NCE has said it requires Sh30 million to automate the system and does not see itself migrating to online trading within the stated time.
In 2018 NCE had automated its operations, but it is yet to go digital as it requires the necessary software for digital trading.
However, Mr Munya said the auction has been making cash through service fee. He also added the government has no money to fund them.
In 2016, the tea auction sealed a deal with the Trade Mark East Africa for automation of its system. The task was to be completed in December 2019, but Eatta says the work was delayed as the data center took longer to complete.
The trade of coffee has been paralyzed after the ministry of health stopped its trade in an attempt to control the spread of Covid-19.