Kenyan coffee farmers are set to gain greater flexibility in marketing their produce under the Coffee Act 2026, which provides for sales through the Nairobi Coffee Exchange (NCE), direct transactions, international exchanges, and other channels prescribed by the Cabinet Secretary. The reforms are intended to improve market access and farmer returns, but their impact will depend on how the new framework is implemented and whether growers can secure competitive prices beyond the traditional auction system.
The legislation, signed into law by President William Ruto in March 2026, establishes a new framework for regulating coffee production, trading and marketing. Coffee Board of Kenya Chairman Henry Kinyua said the board was working with farmers, cooperatives and other industry stakeholders to implement the changes and develop regulations to operationalise the law. He outlined the four permitted marketing routes during International Coffee Day celebrations in Kirinyaga County on October 1.
The change is significant because approximately 80 per cent of Kenya’s coffee is currently traded through the Nairobi Coffee Exchange. The auction provides a central marketplace for growers and cooperatives to connect with buyers, but the new framework creates additional routes through which eligible growers and licensed industry participants can pursue sales.
Direct marketing, in particular, could give growers and cooperatives greater scope to establish relationships with roasters and other buyers. However, the law does not remove oversight from such transactions. Its provisions on direct sales require coffee samples to be submitted to an exchange for quality analysis and price discovery before a contract is completed, subject to the applicable legal requirements. The practical benefits will therefore depend on the regulations, transaction costs and ability of farmers to negotiate commercially attractive contracts.
The reforms come as Kenya’s coffee sector records stronger auction earnings. Farmers earned KSh41.63 billion (approximately $323 million) from the sales of about 47 million kilograms of coffee during the 2025/2026 coffee year, which ran from October 2025 to September 2026. The proceeds represented an increase of about KSh6 billion ($46.5 million) from the KSh35.6 billion ($276 million) recorded in the previous season.
Payment arrangements are also part of the reform agenda. Under the Direct Settlement System, proceeds from auction sales are transferred through approved settlement providers, with the Coffee Board reporting that growers receive payments within five days. The Capital Markets Authority approved Stanbic Bank Kenya as an additional settlement provider in May 2026, joining Cooperative Bank and potentially strengthening payment infrastructure for the exchange.
The government is also pursuing investments to improve access to higher-value markets. In October, President Ruto directed the provision of KSh100 million (approximately $775,000) for a quality-analysis laboratory at the Nairobi Coffee Exchange, with a six-month deadline for establishment. The facility is intended to support specialty coffee marketing, including a proposed auction for micro-lots of fewer than 10 bags.
These measures address longstanding commercial challenges, but wider constraints remain. Farmers need reliable access to inputs, productive coffee trees, quality processing, market information, and financing while waiting for payment. Smaller cooperatives may also struggle to negotiate direct contracts or meet buyer requirements without aggregation, technical support and transparent pricing.
NBF Insight
Kenya’s Coffee Act creates more options for marketing coffee, but the existence of additional channels does not automatically mean farmers will earn more. Direct sales can improve access to buyers, yet their value depends on whether the price received after quality testing, logistics, finance and transaction costs exceeds what farmers could obtain through the auction.
The next phase of reform should therefore be judged by measurable outcomes: the share of farmers accessing alternative channels, the prices they receive after deductions, payment reliability and the proportion of coffee reaching higher-value markets. Transparent comparisons between auction and direct-sale returns would help growers make informed decisions rather than shifting from one system to another.
For Kenya’s coffee industry, the opportunity is to build a marketing system in which competition, quality and reliable settlement work together. The law has widened the available routes to market; its lasting success will depend on whether those routes deliver better and more predictable returns to the farmers who produce the coffee.
