NAIROBI, May 21 (Reuters) - Kenya coffee prices were strong during the last auction ahead of a month-long recess as traders stocked up on their quantities despite the poor qualities on offer, a market official said on Wednesday.
The average price per 50-kg bag was $140.13 from $147.48 last week and 21,374 bags out of the 24,463 bags on offer were sold.
"Considering much of the coffee was of poor quality, the average price was good," said Daniel Mbithi, an official of the Nairobi Coffee Exchange (NCE). "There were very few premium lots."
Prices for top grade AA rose to $311-$147 per bag compared with $262-$140 at the previous auction. Grade AB drew weaker bids to sell between $221-$98 from $234-$136 last week.
Mbithi said crop assessments showed the country could produce more coffee in the coming season. However, an expected bumper harvest in Brazil would suppress prices in Kenya.
The east African producer enjoys premium prices for its specialty beans although it is a tiny producer.
The Coffee Board of Kenya estimates that output in the 2008/09 crop year would jump to about 58,000 tonnes from about 45,000 tonnes in the current year.
Mbithi said that direct sales between buyers and farmers stood at about 23,000 60-kg bags over October 2007 to May 2008.
Kenya allowed farmers to bypass the traditional auction system a couple of years ago after the growers said a long string of middlemen were eating into their profits.
"We are getting more farmers using the direct sales and that is also affecting prices here," Mbithi said.
"Marketing agents (on behalf of farmers) are using price quotations from direct buyers to set their reserve price at the auction and most dealers are paying up," he added.
Last week, farmers from Kagumoini in central Kenya sold AA coffee for $1,138 per 50-kg bag for some specialty coffee through the direct sales system.
Below are the top and bottom prices according to the NCE.
GRADE PRICES $
THIS WEEK PREVIOUS
AA 311-147 262-140
AB 221-98 234-136
C 183-87 200-101
PB 264-166 214-128
T 169-62 80-80
TT 187-128 198-126
(Reporting by Helen Nyambura-Mwaura)
