Auction System Automation
In April 1998 the coffee bidding process was automated and it changed from the commonly known open-outcry to the push buttons, which has continued until now. This first phase of automating the auction process of the Nairobi Coffee Exchange has served for 20 years to-date! This is commendable system performance as an instrument for the price discovery of the country’s coffee sales.
The upgraded system
The upgraded auction system was successfully taken into service at the beginning of May 2018. The system has a state-of-the-art software and the latest LED technology. This whole development offers coffee growers and buyers the necessary guarantee for a transparent, accurate and reliable sales platform which can stimulate growth in the entire coffee sub-sector.
The upgrade was technologically necessary and on the other hand, the intention was to considerably improve and accelerate the sales process. For instance, before the upgrade, the auction would last 8 to 10 hours. thus causing some traders to leave before the end of the auction. In effect, this meant that some coffees would not be competitively sold and therefore leading to lower prices for farmers’ coffees sold in such catalogues. However, with the implementation of the new auction system, we have observed some sales of similar magnitude being completed within half that period of time, that is, around 4 hours, which provides a great satisfaction among the auction participants.
On the part of the growers, the upgraded auction system offers an opportunity to see the auction process nearer home, that is, from their own regions which has been availed by screens mounted at various stations. For a start, the Exchange has identified two regions: Nyeri and Kericho counties. In Nyeri, the screen will be mounted at the Co-operative Unions offices. After consulting with the county government, it was agreed that it would be the most appropriate location since it is better accessible by the farmers. In Kericho, the county headquarters is in a predominant tea growing area and therefore it was agreed the screen be mounted at the Kipkelion Coffee Mills hall, where coffee farmers are concentrated.