Bloomberg News

Kenyan Benchmark Coffee Price Falls 4.8% as Quality Declines

September 13, 2011

(Updates with trader’s comment in fourth paragraph.)

Sept. 13 (Bloomberg) -- Kenya’s benchmark coffee price fell 4.8 percent at an auction today on lower bean quality and a drop in global prices, the Nairobi Coffee Exchange said.

The average price for the benchmark AA grade declined to $479.56 a 50-kilogram (110-pound) bag from $503.91 a week ago, the exchange said by e-mail. The grade sold for as much as $519 a bag, compared with $538 at the previous sale, while supplies declined 41 percent to 400 bags, it said.

The average price for all coffee sold slipped to $349.56 a bag from $350.52 at the previous auction.

“Prices dropped partly because the quality of the coffee was lower than for last week,” Mansukh Shah, a coffee trader at Alanwood Ltd., said by phone from Nairobi. “Prices at New York were lower and negatively affected prices at the exchange.”

Sales at the auction climbed 7.6 percent to 8,313 bags valued at $3.5 million from 7,726 bags worth $3.3 million last week as buyers replenished their stocks ahead of the close of the 2010-11 season on Sept. 30, the agency said.

Supplies of beans at the auction fell 5 percent to 12,577 bags from 13,232 bags last week because of reduced stocks, the agency said. Supplies in the market are lower than usual as the nation draws closer to the end of the coffee year after a drought cut yields, the exchange said.

Kenya’s coffee production in the 12 months through September may decline to 40,000 metric tons from the previous forecast of between 49,000 and 55,000 tons, James Wahome, quality manager at the Coffee Board of Kenya, has predicted. Output was 45,000 tons last season.

The country harvests the bulk of its crop from October through December and a secondary crop from April to June.

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

--Editors: Dan Weeks, Nicholas Larkin.

To contact the reporter on this story: Fred Ojambo in Kampala at

To contact the editor responsible for this story: Gordon Bell at

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