CS Munya orders audit on tea auction systems

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Cabinet Secretary for Agriculture Peter Munya has given a directive for the tea sector regulator to perform an audit of tea auction systems.

Munya gave the Tea Board of Kenya (TBK), a two-week ultimatum to appoint an auditor who would do an extensive review of the systems that are run by the East African Tea Trade Association (EATTA).

This follows an accusation that was made by the government to the auction, of partnering with other people to fix tea prices, which in turn has led to inefficiencies that have inhibited tea farmers from enjoying their produce fully.

“To further enhance the price discovery mechanisms at the auction, there is a need to audit the Electronic Auction Trading Platform to ensure it is foolproof and not prone to inefficiencies and lack of accountability in price determination that characterized the ‘open outcry’ system,” Munya said.

As the sector continues to seek transparency, the Mombasa Tea Auction was given a directive to shift their dealings from a manual to an electric system.

Prior to this, reforms were made by the Kenya Tea Development Agency (KTDA) holdings, in the last fiscal year, where an introduction of a minimum reserve price was made to the Mombasa Auction.

This saw the rise in prices that had stalled at Ksh.203.83 in the previous years of 2020 and 2021, seeing a growth rate of more than 50 percent to stand at Ksh.339.72 after KTDA receives a maximum profit.

“We are hopeful that this trend will continue in the second half of the financial year (January to June 2022), when the full impact of the minimum price will be felt,” said KTDA holdings CEO, Wilson Muthaura.

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