Kenyan coffee has traditionally reached overseas markets in two ways: through the Nairobi Coffee Exchange auction, or through a direct sale by a grower to an overseas buyer. The Coffee Act (No. 8 of 2026) adds a third route, sale through an international exchange, and creates a new licence to go with it: the coffee trading licence. This article explains what the licence is, who can hold it, how it fits with the rules on international exchange contracts, and what is still missing before the route can be used with confidence.
What the coffee trading licence is
Section 79 of the Act provides that the Coffee Board of Kenya may, for the purpose of trading in the international coffee market and auction, issue a coffee trading licence to a grower or a buyer. The Second Schedule lists the coffee trading licence among the licences the Board issues. The same section allows the Board, in collaboration with the Cabinet Secretary responsible for trade, to issue trade insurance to a co-operative society to indemnify it against risk on coffee exported in an international market or auction.
Two features stand out. First, the licence is available to both growers and buyers. A buyer’s licence lets its holder buy at a Kenyan exchange, and a grower can already sell direct to an overseas buyer, but the trading licence is aimed specifically at participation in international markets. Second, the Act says the Board “may” issue it. Nothing in section 79 sets eligibility criteria, capital requirements or conditions, so those will have to come from regulations or from the Board’s own licensing practice.
How it fits with international exchange sales
Section 72 lists the ways Kenyan coffee may be offered for sale: by auction at an exchange, by direct sale, through an international exchange, or by any other method the Cabinet Secretary prescribes in consultation with the licensing authorities. Section 78 then sets out how a sale through an international exchange works.
Under section 78(1), a grower, or an agent representing the grower, may offer coffee for sale in the prescribed manner in an international exchange, and may enter into a written contract for future sale for that purpose. Section 78(2) requires the contract to state the name of the exchange, the quality and quantity of the coffee, the mode of payment, the mode and place of storage, the details of insurance cover and a dispute resolution clause. Under section 78(3), the contract must be submitted to the Board within fourteen days of signing.
Section 73(4) adds that a contract for future sales is not subject to the usual requirement in section 73 to submit a sample to a local exchange for price discovery before a direct sale is completed. That is a meaningful practical difference for growers who want to sell forward on an international platform.
Who can act for a grower
An agent under the Act is a person registered by the Board who may be appointed by a grower to facilitate overseas direct sales with regard to logistics (section 2). Section 30 requires agents to hold the Board’s licence, registration certificate or permit, and operating as an agent without one is an offence punishable by a fine of up to KES 5 million, imprisonment of up to three years, or both. A buyer and its associated entities cannot act as agents (section 28(5)), so a trading house that holds a buyer’s licence cannot also represent growers in international exchange sales.
What is still missing
The international route depends heavily on secondary legislation that, as far as we have been able to establish, has not yet been published.
No definition of “international exchange”. The Act defines an “exchange” as a company incorporated under the Companies Act and licensed by the Capital Markets Authority to trade clean coffee, but does not define an international exchange. It is therefore unclear whether a foreign commodity exchange, an overseas auction platform or an online marketplace qualifies, and whether the Board or the Capital Markets Authority will need to recognise it first.
Regulations are expected but not yet made. Section 78(4) requires the Cabinet Secretary to prescribe regulations on the sale of coffee at an international exchange, and section 78(1) refers to sales “in the prescribed manner”. Section 99 gives the Cabinet Secretary a general power to make regulations, including on forms, application processes and conditions for licences. Until those regulations exist, the procedure and requirements for a coffee trading licence are not fixed.
The insurance scheme needs a counterparty. Trade insurance under section 79(b) is issued in collaboration with the Cabinet Secretary for trade. How it is priced, who underwrites it and when a claim can be made are not set out in the Act.
Applicants should therefore approach the Board early, ask in writing what information it requires for a trading licence, and keep the response on file. Like every licence under the Act, a trading licence is not transferable, expires on 30 June each year and must be renewed by 1 June (sections 28 and 35).
How We Can Help
Clay & Associates Advocates advises growers, co-operatives and trading houses on coffee licensing under the Coffee Act, on international exchange contracts under section 78, and on applications to the Coffee Board of Kenya. Our map of who issues each coffee licence and our guide to the coffee buyer’s licence explain the wider regime. Contact our Regulatory & Compliance team to discuss an application.
Sources: Coffee Act (No. 8 of 2026), Kenya Law, sections 2, 28, 30, 35, 72, 73, 78, 79, 99 and Second Schedule.
Frequently asked questions
Who can hold a coffee trading licence in Kenya?
A grower or a buyer. Section 79 of the Coffee Act allows the Coffee Board of Kenya to issue the licence for trading in the international coffee market and auction.
Can Kenyan coffee be sold on an international exchange?
Yes. Section 72 lists sale through an international exchange as a lawful method, and section 78 sets the contract requirements. The Cabinet Secretary must still make regulations on how such sales work.
Must an international exchange contract be filed with the Board?
Yes, within fourteen days of signing, under section 78(3). The contract must state the exchange, the quality and quantity of coffee, payment, storage, insurance and dispute resolution.
Does a forward contract need price discovery at the Nairobi Coffee Exchange first?
No. Section 73(4) exempts contracts for future sales from the local sampling and price discovery requirement that applies to direct sales.
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This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.
