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Kenya: Coffee Auction Prices Hit a Record
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Business Daily (Nairobi)
26 September 2007
Posted to the web 26 September 2007
Allan Odhiambo
The price rally witnessed at the Nairobi Coffee Exchange (NCE) weekly auction set another record yesterday, marking the third week that prices have scaled new heights.
The record breaking run reflects a scramble by buyers for quality offers following a dump spell that has seen the coffee berry disease ravage the crop.
The auction's average price struck the $136.91 per 50 kilogramme mark yesterday with analysts predicting that the performance would carry on into the next sale. Over the last three weeks, the market has gained $9 per 50 kilogramme bag.
Industry statistics showed that such high earnings were last witnessed around 2000 when the country realised a boom in earnings.
"The overseas markets are quite vibrant fanned by short supplies and similar factors are replayed locally where many have run short of coffee," Mansukh Shah, of Allan Wood Limited told Business Daily moments after the closure of trading at the NCE.
The shortage of the commodity in the country is largely attributed to a recent cold spell over most growing areas that affected the development of coffee berries. Cases of Coffee Berry Disease (CBD) were also reported in several areas especially in upper zones of Embu, Kirinyaga, and Nyeri.
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The two factors have since seen the Coffee Research Foundation (CRF) revise its crop estimates for 2007 from 53,214 metric tonnes to 48,710 metric tonnes.
Mr Daniel Mbithi, an official at the auction said the trend may be sustained over the coming weeks because of a steady price growth fuelled by demand in key markets such as New York.
"The markets are intertwined and the latest developments on both sides are quite impressive. The overriding factor is demand and we expect this to stay on a little," he said.As at yesterday, the International Coffee Organisation (ICO) daily composite price firmly stood at US Cents 117.76 per pound.
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