This pushed the prices of coffee sold on the auction to $352 per 50 kg bag from $355 while the average prices of all the coffee varieties sold this week during and after the auction dropped from $7.9 million last week to $7.5 million on Tuesday’s auction.
“The prices of the 50kg bag of grade AA dropped from $537 last week to $472 on Tuesday’s auction, while the prices of the 50kg bag of grade AB dropped from $433 last week to $405,” said the Nairobi Coffee Exchange in a weekly report.
The reduction of supply comes at a time when the industry is experiencing the highest prices of the crop globally that has seen heavy inflows of foreign exchange.
Coffee offered dropped from 18,000, 50kg bags last week to 17,000 this week and is also expected to fall further next week to about 10,000 bags of coffee beans after the auction starts running fortnightly.
Exporters of both tea and coffee are however benefiting from the high international prices and favourable exchange rates in the market helping to cushion the low supplies.
While tea prices on this week’s auction also dropped on reduced demand from key export destinations like Sudan, Russia, Afghanistan, Egypt fully returning to the market to retain her key position as the buyer of the Kenyan tea after weeks of political unrest.
“There was less interest from Pakistan Packers, Afghanistan and Sudan,” reported the African Tea Brokers in a statement.
The weekly report from the auction showed that about 26.67 per cent of the 7.83 million kg was not sold at the auction this week.
Best BP1s sold for $3.42-$3.70 which was lower than the $3.90 fetched at last week’s sale, while other varieties like the Best Pekoe Fanning Ones TEAPF1 fetched up to $3.49 per kg, down from $3.66 per kg the previous week. Demand from the north African state had dropped in the past few weeks owing to the political unrest.
The production of both tea and coffee for this year is expected to dwindle on drought concerns compared to last year. The crop for the month of January, 2011 has been announced at 35,999,139 kgs showing a decrease of 1,714,265 kgs (4.55 per cent) compared to the same month 2010. For the latest updates PRESS CTR + D or visit Stock Market news Today
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