Kenyan Arabica Coffee Prices Jump 18% at Auction

By George Mwangi

Special to DOW JONES NEWSWIRES

NAIROBI–The average price of Kenyan arabica coffee jumped 18.19% at the second auction after the seasonal recess, compared with the first, according to a report Wednesday.

The average price for all grades was $192.88 for a 50-kilogram bag on August 9, compared with $163.19 on July 26, while average prices for some grades were lower, according to an auction report.

Prices had been falling before the annual break in June, largely due to the lower quality of the bean on offer at the end of the previous season, according to Daniel Mbithi, chief executive of the Nairobi Coffee Exchange, which runs the weekly auction.

There was no auction last week because a prolonged cold spell from May to August has delayed coffee beans drying, said Karen Mumbua, the business administrator of the auction house.

Kenya’s arabica auction uses New York ICE futures prices as its benchmark.

At this week’s Nairobi auction, 17,799 50-kilogram bags were offered, up from 10,270 bags at the previous sale. The report didn’t give the amount sold.

Coffee production for the year from October 2015 to September 2016 is expected to remain around 40,000 metric tons, according to Kenya Coffee Directorate statistics.

The following are the high and low prices, in dollars, for a 50-kilogram bag of each of the main grades, as quoted by the exchange. The overall average price for the auction includes the grades listed below, as well as other grades of lower quality.

 
 GRADE  LOW  HIGH  WEIGHT  AVERAGE  PREVIOUS AVERAGE 
 
 AA     51   302   157,326  245.90       212.58 
 AB     50   264   429,384  227.79       220.57 
 C      50   246   173,626  209.66       178.93 
 E     236   297     1,521  264.42       268.70 
 PB    119   261    51,295  225.77       206.48 
 T      24   165    40,960   92.90       126.19 
 TT     33   237    26,649  161.14       181.08 
 UG     32   101    63,000   59.47        42.00 
 UG1    40   159    61,624  103.58        72.39 
 UG2    41   152    22,165   69.57        56.09 
 UG3    60    79     6,053   69.69        45.00 
 
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Write to George Mwangi at realtimedesklondon[a]dowjones.com

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