Strengths of the auction system
- Everything is public. Weekly prices are set in an open forum, with great transparency about who is buying and at what prices.
- Everybody pays the same price for the same tea. Large multinational companies have no ability to negotiate lower prices.
- Smaller producers can participate: It is possible for any producer to market their tea to the local, regional and international market otherwise it would be very difficult and very expensive to do this.
- Smaller buyers can participate: All producers sell a proportion of their tea at auction, so even the smallest buyers can have access through division of lots and hence smaller quantities can be bought.
- It is highly efficient: It is a very effective way of moving large volumes of tea from producers to buyers and helps producers’ cash flow.
What makes Mombasa Auction Centre Attractive?
- It is dollar denominated making it convenient for the international tea buyer
- It is the only multi origin auction centre handling tea from ten producer countries. This is a benefit as it offers the buyer variety of tea thereby more attractive
- It is free from VAT since the tea sold through the auction does not attract taxes.
- It is the auction Centre that most embraces innovation; including the electronic bill board tea sales payment system, live streaming that allows remote access to the auction proceedings by the producer from the comfort of their farm. The next move is the development of an electronic auction platform to enhance efficiency and transparency.
- Payment for tea is assured and made by the tea buyers within 9 working days.
- Access to the port thereby allowing efficient delivery to overseas customers
- It runs every week throughout the year, except during the week of Christmas.
