Kenya's Coffee Prices Drop for 3rd Week on Inferior Beans

Kenya coffee prices slumped for the third successive week in reaction to inferior beans and a bearish global market, the Nairobi Coffee Exchange said.

Average prices for all the coffee sold fell 4.5 percent to $148.79 for a 50-kilogram (110-pound) bag, from $155.73 a week earlier, the exchange said today by e-mail from Nairobi, the capital.

The exchange, a trading platform for the Kenya Coffee Producers and Traders Association, said the average price for the benchmark AA grade fell 5.9 percent to $263.34 a bag. The grade sold for as much as $301 a bag compared with $305 at the previous sale.

“Prices at New York were down,” Mansukh Shah, a coffee trader at Nairobi-based Alanwood Ltd., said by phone. “The quality of the coffee was inferior and these could be the lowest prices this season.”

Superior beans were sold earlier in the season leaving behind inferior grades, according to the association. The country will start its annual auction break on July 18 because of reduced stocks, the association said yesterday. Germany, the U.S., Canada, the U.K., Belgium, the Netherlands, Luxembourg, Sweden and Finland are some of the main importers of Kenyan beans, according to the Coffee Board of Kenya.

Sales at the auction climbed 42 percent to 7,875 bags valued at $1.42 million from 5,542 bags valued at $1.05 million last week, the exchange said.

Supplies at the auction rose 31 percent to 19,157 bags from 14,584 bags last week, the exchange said. Kenya harvests its early crop from May through July, while the main crop is reaped from September through December.

The following are details of today’s auction in U.S. dollars per 50-kilogram bag:

Grade          Low            High          Average
AA             171            301           263.34
AB             129            241           201.46
C              107            191           154.86
HE             130            130           130.00
MH             101            115           106.62
ML              78             88            79.78
PB             154            228           183.49
SB              63             63            63.00
T              104            151           127.73
TT             157            160           158.55
UG1            100            163           144.03
UG2            130            132           130.62

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editor responsible for this story: Hilton Shone at hshone@bloomberg.net