Coffee Processing and Export in Kenya: A Legal Guide for Investors

Kenya remains one of the world’s most respected origins for washed arabica coffee, and investors entering coffee milling, processing or export are stepping into a regulatory system that has just been substantially rebuilt. Growing, primary processing, milling, warehousing and marketing coffee are all licensed activities in Kenya, and the institution that issues those licences changed in 2026, when a new Coffee Board of Kenya took over functions the Agriculture and Food Authority’s Coffee Directorate had held since 2013. This guide sets out what a prospective miller, processor or exporter needs to know: the licences required to process coffee, the rules governing sale through the Nairobi Coffee Exchange auction and through direct sales, the role of cooperative societies in aggregating smallholder coffee, and the requirements for lawfully exporting Kenyan coffee.

The legal framework: from the Crops Act to the Coffee Act, 2023

Coffee has long been regulated as a scheduled crop under the Crops Act, 2013 (No. 16 of 2013), the umbrella statute that gave the Agriculture and Food Authority (AFA), established under section 3 of the Agriculture and Food Authority Act, 2013, general oversight of Kenya’s crop subsectors. Section 11(4) of that Act required AFA to maintain a Coffee Directorate to carry out day to day regulation of the coffee industry, and the detailed operational rules were set out in the Crops (Coffee) (General) Regulations, 2019 (Legal Notice No. 102 of 2019), made by the Cabinet Secretary for Agriculture under section 40 of the Crops Act. These Regulations, which revoked an earlier 2012 legal notice, cover registration of growers and cooperative societies, licensing of nurseries, pulping stations, mills, warehouses and roasters, and the rules for coffee trading, quality assurance and export.

In March 2026, President William Ruto assented to the Coffee Act, 2023, a standalone statute that had been before Parliament since 2023. The Act revives the Coffee Board of Kenya as a corporate body with its own board of directors and chief executive, and transfers to it the licensing and regulatory functions AFA’s Coffee Directorate previously performed, including licensing millers, marketing agents, warehousemen, exporters and buyers. Kenya’s state export promotion agency has confirmed that the Coffee Board of Kenya assumed these functions from AFA with effect from late March 2026. The Act also establishes a Coffee Research and Training Institute to take over coffee-specific research previously carried out through the Kenya Agricultural and Livestock Research Organization. Because this transition is recent, an investor should confirm directly with the Coffee Board of Kenya whether new implementing regulations have been issued or whether, as is usual on such a transfer, the 2019 Regulations continue to apply until they are formally replaced.

Licensing a coffee milling or processing operation

Under the 2019 Regulations, a person may not pulp, mill, warehouse, export, import, trade, transport or otherwise deal in coffee without holding a valid certificate, permit or licence, and doing so without one is an offence. County governments issue coffee nursery certificates, pulping station licences, a coffee grower’s milling licence for those who mill only their own parchment or cherry, a commercial miller’s licence for those who mill coffee for others at a fee, coffee roaster licences and warehouse licences. The national regulator issues coffee liquoreur’s licences, independent cupping laboratory licences, coffee buyer’s licences and import permits. Investors should note an important structural rule: a holder of a coffee buyer’s licence, or any entity associated with it, cannot also be licensed as a commercial miller, broker, roaster, agent or warehouseman, and a commercial miller cannot hold a buyer’s, broker’s, roaster’s or agent’s licence either. A coffee processing business that wants to export as well as mill therefore usually needs separate licensed entities or a carefully structured corporate group.

Licence applications are assessed on inspection and evaluation, with reasons given for any rejection within fourteen days and a right of appeal to the Cabinet Secretary or the relevant County Executive Committee, followed by judicial recourse if that appeal fails. Licences run to 30 June each year, are not transferable, and applicants for a new licence must be gazetted for public objections at least thirty days before it is granted. A commercial miller must allocate a traceable out-turn number to every delivery, give the grower notice to be present during milling, insure the coffee in its possession, digitise its weighing and record-keeping, and enter written commercial milling agreements with growers and cooperative societies in the prescribed form. Coffee milled or delivered must also comply with the Kenya Coffee Standards issued by the Kenya Bureau of Standards (KEBS).

Selling coffee: the Nairobi Coffee Exchange auction, direct sales, and the Direct Settlement System

Kenyan coffee may lawfully be sold in two ways: through the coffee exchange auction, or through direct sales. Direct sale prices must be competitive with, and compare favourably to, prices discovered at the exchange. The Nairobi Coffee Exchange (NCE) is the licensed exchange, an incorporated company regulated by the Capital Markets Authority under the Capital Markets Act (Cap 485A) and the Capital Markets (Coffee Exchange) Regulations, 2020. NCE manages the auction floor, the central sample room, the information registry and the Direct Settlement System, and its current trading procedures are set out in the Nairobi Coffee Exchange Trading Rules, 2024. In an auction sale, a miller deposits graded coffee in a licensed warehouse, the warehouseman issues a coffee warrant, a broker or grower-miller lists it for sale, the grower or its broker sets a reserve price, and successful bids are settled through the Direct Settlement System before ownership transfers on the exchange’s central registry.

The Direct Settlement System (DSS) is a banking facility, currently provided by the Co-operative Bank of Kenya, approved by the Capital Markets Authority for clearing and settling coffee sale proceeds free of interference by any party other than the grower and the service providers it authorises. Buyers must remit payment by the “prompt date” specified in the sales catalogue, which cannot be more than five working days after the sale, and the DSS provider must in turn remit proceeds, net of contractual and statutory charges, to growers within five working days of receiving them. Direct sales, sometimes called the “second window”, allow a licensed grower, cooperative, estate or grower-miller to contract directly with an identified overseas buyer or local roaster, but the arrangement, its grade, quantity, price, certification and payment terms must be notified to the regulator and the county government, and an inspection certificate obtained before the coffee is exported.

Cooperative societies and sourcing coffee from smallholders

Most Kenyan coffee is grown by smallholders who deliver cherry through cooperative societies rather than operating their own pulping stations. A coffee cooperative society must be registered under the Cooperative Societies Act (Cap 490) and must also register with the relevant county government as a grower for purposes of the coffee regulations. A cooperative that runs a pulping station or mill on behalf of its members must hold the corresponding county licence, and where it does not have digitised weighing and record systems, it is required to put these in place within a fixed period after the Regulations took effect. Cooperatives handling members’ cherry must weigh it on calibrated scales, record quantity and quality against each grower’s name, make that data accessible to the grower for traceability, and competitively procure the services of a miller or other service provider before entering a contract for the coffee’s processing or marketing.

A foundational rule for any investor structuring an off-take or milling arrangement with a cooperative is that the grower is recognised as the owner of the coffee until it is sold and paid for. A processor cannot simply treat cherry or parchment delivered to its mill as its own stock; the usual commercial structure is a written milling agreement under which the miller processes the grower’s coffee for a fee, or a purchase concluded through the auction or a registered direct sale, rather than an outright purchase of unprocessed cherry outside these channels.

Exporting Kenyan coffee: licensing, standards and certification

Physical export of coffee requires a phytosanitary certificate presented to the customs authority, and the regulator authorises coffee exports through the coffee buyer’s licence, notification and registration of any direct sales contract, a certificate of origin, a certificate of quality and a movement permit for the consignment. Coffee imported into Kenya must likewise conform to the Kenya Coffee Standards and be accompanied by a certificate of origin and a phytosanitary certificate from the country of origin. A person who blends Kenyan coffee with coffee produced outside Kenya must declare the percentage of Kenyan coffee in the blend, a rule aimed at protecting the integrity of Kenya’s origin reputation in export markets.

Beyond sector-specific licensing, exporters commonly also engage with the Kenya Export Promotion and Branding Agency (KEPROBA), the state agency that in 2019 took over the roles of the former Export Promotion Council and the Brand Kenya Board, for market access support and trade facilitation. The core coffee-specific export authorisation, however, sits with the coffee sector regulator, now the Coffee Board of Kenya rather than AFA’s Coffee Directorate. Investors should build licensing timelines around both regimes: the coffee-specific licence and movement permit for the consignment, and any general export documentation KEPROBA or Kenya Revenue Authority customs processes require.