Kenya Coffee auction system Coffee has two main trading modes in Kenya

Kenyan auction system:

Most of the coffee beans are graded and then sold at the auction site by the Kenya Coffee Bureau. The system of public auction can be traced back to 1934, and the auction method adopts the agent system. There are 50 licensed agents in Kenya who send sample beans to their customers for cup testing. Customers can bid for their favorite coffee by agents at auction. But this approach seems to encourage intermediary agents to erode farmers' incomes, so in 2006 Kenya opened 32 more independent sales agents to directly contact foreign coffee buyers without going through auctions.

But all these have to be of the same quality as the Kenyan Coffee Agency? Storage? Only standards such as bank guarantee can. The two systems operate in parallel at the same time. After several years of development, it is the most transparent auction distribution system. The better the quality of coffee is, the better the price can be measured through the cup, so that more cooperatives and farms are willing to join.

There are two main modes of trading coffee in Kenya:

At the Nairobi Coffee Exchange auction (central auction system), 85 per cent of coffee beans are traded through the auction system.

Or through direct trade (often referred to as the "second window"), only 15% of coffee beans are traded through direct trade.

Kenyan coffee transaction process

Model 1: Nairobi Coffee Exchange auction

Since the establishment of the auction system in the 1930s, most Kenyan coffee has been traded in this way. Coffee auctions are held every Tuesday during the harvest season. It is an auction system developed from a "public outcry" auction system, in which each trader bids by pressing an electric trigger. Through this system, the price of high-quality, highly popular coffee will soar as agents compete with each other.

Model 2: direct trade

Direct trade enables farmers and buyers (such as bakers or importers) to discuss and determine a price different from that of auctions before or during harvest. Some exporters also buy coffee directly from relevant marketing agents or factories, using the previous week's specific grade auction price as a negotiated reference price. Direct trade can lead to more income for farmers who produce high-quality coffee.

Kenyan coffee is made up of two main growing areas: plantations, consisting of ±3300 farms including coffee ±40000 hectares (HA). In the internal planting industry, there are also 3000 huts (50 hectares). This accounts for about 25% of Kenya's coffee-growing land. The other 75 per cent are cooperatives, with a total of 700000 small farmers growing 120000 hectares of coffee as a member.

Small farmers' cooperatives began to build factories / cleaning stations in the 1960s so that they could handle their coffee in the same way as large plantations.

Today, these factories have as many as 2000 members, and to this day, the high quality of their Kenyan coffee is known to the world.