Trading at the Mombasa tea auction goes digital
Friday April 08 2022
The new trading platform at the tea auction. PHOTO | FILE
The Mombasa tea auction has moved its transactions to a $2.12 million digital platform dubbed Integrated Tea Trading System (iTTS). The iTTS launched by the East African Tea Trade Association (EATTA) last week, follows two years of piloting and will end the physical interaction of tea traders at the auction house.
EATTA chairperson Arthur Sawe said the platform, which was funded by the Danish International Development Agency (Danida), will increase the profits of farmers and dealers by cutting operation costs.
"The digitisation seeks to fill gaps in the current procedures, which are done manually including membership and cataloguing.
‘‘This will reduce cost and time as traders would not have to travel physically to trade their teas," said Mr Sawe.
"In order to ensure sustainability, the cost of maintenance of the system has been distributed among users based on kilogramme of tea transacted and appointment depends on the business model and level of utilisation by the membership," he added.
The automation will also drive sales which will due to time reduction in the tea trading cycle.
Simple gadgets
Users will only need simple gadgets such as mobile phones to trace the movement of their tea across factories and shipping companies and it has features to help dealers analyse market trends in the world.
The weekly Mombasa tea auction serves Kenya, Mozambique, Tanzania, Malawi, Burundi, Ethiopia, DRC, Rwanda, Madagascar and Uganda.
Kenya's East Africa Community Permanent Secretary Kevit Desai said;
"The manual procedure involves middlemen, producers, warehouses, brokers, buyers.
“The trickle-down effect was that farmers had little say in the prices of their tea but the new system is inclusive, and farmers will benefit immensely."
Morgens Strunge Lursen, counsellor at the Danish embassy in Kenya, said the Mombasa tea auction is just one of several projects supported by Danida in the region meant to ease cross-border trade.
Position sector
"The launch of the iTTS is particularly exciting because it helps position such a critical sector for future growth and success by driving efficiency and supporting both increased traceability and information exchange," said Lursen.
Having expedited the automation in early May 2020 at the onset of Covid-19, the project helped the industry meet social distancing requirements in line with Covid-19 protocol. The buyers were able to bid for tea from the comfort of their offices or homes.
The iTTS is expected to reduce the tea trading cycle by about 65 percent from the current 45 to 60 days to less than a month, and also fast-track payments.
EATTA managing director Edward Mudibo said the platform will ensure stakeholders of the tea auction — farmers, buyers and sellers — receive real-time information on what is happening on the auction, which will bring transparency and increase confidence in the process.