The Kenya Agricultural Commodity Exchange
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CTA. 2002. The Kenya Agricultural Commodity Exchange. ICT Update Issue 9. CTA, Wageningen, The Netherlands
Permanent link to this item: http://hdl.handle.net/10568/57512
by Abraham W. Okolla The Kenya Agricultural Commodity Exchange (KACE) supplies reliable and timely information on the availability and prices of a wide range of commodities, and links buyers and sellers in domestic and global markets
Only a few years ago, the farmers in Bungoma and Eldoret knew nothing about market information, or how it could help to improve their lives. They were always complaining about the middlemen who were cheating them on prices. For any one crop, the marketing chain consists of multiple middlemen, each taking a margin at every stage between producer and consumer. The Kenya Agricultural Commodity Exchange (KACE) was established in 1997 to make available reliable and timely information on the availability and prices of a wide range of commodities, and to link buyers and sellers in domestic, regional and even global markets. Based on the success of its actual trading floor in the centre of Nairobi, KACE has now taken its services online, with the Regional Commodity Trade and Information System (RECOTIS), and a small but expanding network of local market information centres (MICs). KACE staff collect information on the prices of various commodities from market vendors in Nairobi, Bungoma and Eldoret. The information is forwarded to KACE headquarters, where it is processed and made available to members via the RECOTIS pages on the KACE website, on notice boards at the MICs, or by fax. Trades are made through competitive bids and offers, which the system prioritizes according to price and time of receipt, and posts them on the website. Once a buyer and a seller agree to trade, KACE acts as a clearing house and (for a commission) arranges the financial and logistical aspects of the sale. Bungoma and Eldoret are small towns serving commercial and smallholder farming communities. Access to telecommunications is limited, and usually expensive. However, the MICs are equipped with phone, fax and computers with a dial-up connection to the Internet, so that members of farmers´ associations, unions, cooperative societies and small traders can now log on to the KACE website and place their offers of produce for sale. They can also obtain agribusiness news and information that is hoped will encourage business partnerships and promote trade both within Kenya and with the rest of Africa. For the farmers the centres have brought many benefits. They do not have to go far to find the market information they need, and are now far more self-reliant. Many visit the centres regularly to check on the prices of crops such as maize, millet, potatoes, bananas, sorghum or soybeans on different markets, and so can decide when and where to sell their produce for the best prices. At first the farmers were indifferent, especially when they learned that it would cost them a few shillings to check prices at the MICs or to place offers and bids. Then they realized that it was far better to invest a small amount now than to lose hundreds of shillings to middlemen later. A very encouraging recent development is that some small farmers have formed new associations and have begun pooling their produce in order to access better markets where the prices are higher. The numbers of KACE members (currently 456 in 25 countries) and of visitors to the website (averaging 195 per day since its launch in March 2002) are increasing steadily. For its members, KACE has made the marketing process more transparent and has provided access to a range of information and resources that was unimaginable just a few years ago. Abraham W. Okolla is marketing manager of http://www.kacekenya.com/ KACE.