Nairobi Coffee Exchange (NCE) is aiming at 20 percent increase in revenue from auction fees, commissions and other related services annually for the next five years as per the newly unveiled strategic plan.
Chairperson of NCE, Kenneth Gitonga, said the growth target, which according to him is quite ambitious, is part of the measures to be taken to strengthen the Exchange’s financial resilience in the face of fluctuations in the global coffee prices that have continued to affect earnings along the entire value chain.
Gitonga explained that dependency on global market trends has made the Exchange vulnerable to volatility. Besides, he mentioned the need to diversify the sources of revenue and carry out operational efficiency reforms to stabilize income.
“Since global coffee prices are quite unstable, the Exchange should look for sustainable revenue strategies that will keep it safe from external shocks, ” he said.
Focus on Technology and Automation
Investing further in technology to automate most of the Exchange operations is one of the main aspects of the five, year plan. The modernization initiative is expected to make coffee trading processes more transparent, efficient, and faster.
The automation of auction procedures will lead to better data management and fewer manual errors, thus, enabling the Exchange to be competitive and at the same time, a modern trading platform.
Some industry stakeholders hold the view that digitization may, among other things, strengthen farmers’ trust by improving the ability to trace and monitor activities in real, time.
Kenya’s coffee sector has, for a long time, been susceptible to global commodity price changes, currency fluctuations, and changes in demand patterns in major export markets. The Exchange plans to develop a revenue, raising buffer from auction, related services and by diversifying its income sources to protect itself against market instability.
The strategic plan comes at a time when stakeholders in the coffee value chain are pushing for reforms that would result in higher farmers’ earnings, better governance, and enhanced Kenya’s reputation for its premium, quality coffee in the international markets.
Upon successful implementation, the plan is anticipated to achieve more than just the financial stabilization of the Exchange. It will also fortify its position as a vital channel between Kenyan coffee farmers and buyers in the global market.
