Quality coffees still on demand at auction

By Daniel Mbithi

Coffee auction at Nairobi Coffee Exchange witnessed a continued demand for high quality beans. Despite the slight drop in the average price from $244.44 to $222.63 due to some lots of low quality on offer, the general demand for good quality was evident with some lots going well over the $500 mark per 50 kg.

This trend is anticipated to continue for the better part of the month.

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Quality pushes Coffee prices up at the exchange

Coffee average prices surge to a year high of $244.44 per 50kg in yesterday’s auction as compared to last week’s $214.68 marking a 14% increase, fueled by increased coffee quality witnessed in the market. Similar prices were witnessed last in February, 2015.

Grade AA rose from an average of $265.75 last week to $314.37 this week, while grade AB moved from $225.10 to $246.78

New Ngariama FCS, Kamwangi Factory from Gichugu in Kirinyaga, posted the highest price at $566 per 50kg for its AA grade of 133 60kg bags followed closely by Nyeri's Barichu FCS, Gatomboya Factory in Karatina at $ 534 for 153 60kg bags. Ngunguru Factory of Tekangu FCS in Karatina also was third with a $533 for its 54 bags.

These prices come at a time when the international prices have plummeted to a two-year low (see an earlier story before this) indicating that quality is an important factor in pricing!

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Coffee drops to two-year low on Brazil crop forecast

Coffee output in Brazil, the world's top producer and exporter, may rise by as much as 20 per cent to a record in 2016 as rain boosted crops and expanded plantings.

Growers may reap between 49.1 million and 51.9 million bags, up from 43.2 million bags in 2015, the Agriculture Ministry's crop-forecasting agency known as Conab said Wednesday in its first forecast for the next harvest. Arabica production may increase as much as 24 per cent while robusta output is seen rising up to 8 per cent.

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Resumption of the weekly Auctions

The Nairobi Coffee Exchange weekly auctions resumed today after 4 weeks Christmas recess break.

We are currently receiving the main crop coffee mainly from the central region of Mt. Kenya. It is anticipated that we shall have about 25,000 bags (60kg) on offer per week for the next 2 or 3 months.

Despite the low global prices at ICE New York caused by the favorable weather forecast in Brazil, the strong US dollar leading to a weakening of the Brazilian currency, the weak Chinese economic data and probably the Middle East political tension, we are witnessing relatively encouraging prices well above that benchmark.

By Daniel Mbithi