by Ronald Njoroge
NAIROBI, Sept. 12 (Xinhua) -- Kenya plans to launch a Commodity Exchange in order to stabilize agricultural prices, a government official said on Tuesday.
Permanent Secretary in the Ministry of Industry, Trade and Cooperatives Chris Kiptoo told an agricultural forum in Nairobi that 21 agricultural products will be traded at the exchange.
"The automated exchange will help to eliminate middle men by connecting farmers directly to agricultural traders. The objective is to ensure farmers are not exploited," Kiptoo said during a stakeholders' forum on the Kenya Commodities Exchange (KOMEX).
A multi-sectoral taskforce has been established to spearhead the formation of the commodity exchange.
The East African nation has amended a number of laws in order for the commodity exchange to be fully operational. Kiptoo said that the KOMEX was initially supposed to take two years to be operationalized.
"However, we have rolled out an ambitious program so we hope the commodity exchange will be open by June 2018," he added.
Kiptoo said that the Capital Markets Authority laws have been amended in order to incorporate the commodity exchange.
He observed that for the commodity exchange to be successful, Kenya will have to maintain a network of warehouses where farmers can store their produce once they harvest their crops.
"Farmers will be issued with warehouse receipts which they can use to obtain credit from financial institutions," Kiptoo added.
Kenya National Assembly has already endorsed the Warehouse Receipt Bill and forwarded it to the senate.
"We expect the Senate to debate the bill and approve it before the end of the year and that it can become law," said Kiptoo.
KOMEX will be a Public Private Partnership where government will own ten percent of the facility, with the investors owning the rest of the equity.
