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High-grade Kenyan coffee tops $14,000 a tonne

23 March 2010 (Agrimoney.com)

The price of highest-grade Kenyan coffee has topped the equivalent of $14,000 tonne, amid growing concerns that an erratic Brazilian crop will undermine supplies of high-quality beans.

The top price for AA-graded coffee hit $702 per 50 kilogramme bag in Nairobi, up 27% on the top price paid last week.

"People are looking for some special coffee," Daniel Mbithi, an official at the Nairobi Coffee Exchange, told Reuters, adding that the lot, of 60 bags, had come from Kirinyaga in central Kenya.

Buyers have historically paid a premium for Kenyan coffee, which is held in high regard by aficionados but produced in small quantities.

This price, which beat a previous high of $632 a bag set earlier this month, comes in a period between harvests - which last from October to December and April to June - when sellers rely on stocks and lot quality often fades.

'Erratic weather conditions'

Indeed, many analysts have forecast that an unusual harvest in Brazil, the biggest producer of arabica coffee, was likely to drive the scramble for high-grade beans higher.

Heavy rains last year, while seen helping Brazilian coffee yields, sparked atypical flowering patterns, expected to see cherries mature at varying rates, making the crop difficult to process.

"Erratic weather conditions throughout 2009 [mean] highly variable bean quality and relative scarcity of high quality Brazilian arabicas," a report from Fortis Bank Nederland/Vm Group said.

Meanwhile, the crop in Colombia, the second-ranked arabica producer, has been held back by severe drought.

If were not for the hangover from global economic recession, the New York coffee price would be "rather stronger than it is now", the bank added.

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