Kenya Coffee Prices Up

The only place where there is coffee near Burundi is the Karagwe, Bukoba area and we have no complaints from there, an official at a leading Nairobi coffee house said.

John Jarugaba of the Uganda Coffee Trade Federation said refugees could have some impact on our coffee but there was no indication yet that any large numbers would move from Zaire.Jarugaba said Uganda was receiving small amounts of coffee, mostly smuggled in, from eastern Zaire and Burundi.

Coffee traders said the rebel capture of Bukavu and Goma cities in Zaire meant coffee supplies from that area could in the long term be tight.With sanctions on Burundi, prices would rise further for Kenya and Ugandan arabica coffees.

 

At the moment, an impact may not be noticeable. But if Burundians do not tend their crop because sanctions mean they have no money, and if eastern Zaire cannot tend its crop because it is very risky, there would be problems, a trader said.

We would expect to feel the impact around February-March.

Traders said a lack of coffee flow from Burundi meant that Kenyas medium coffees and Ugandan arabicas would be expensive.

That (Burundi) is why the prices are relatively higher in Kenya. But I must add that Kenya has its own problem of scarcity of supplies at the moment, one trader said.

Another trader said the Burundi question would be irrelevant in coming months. He said Burundian-type coffees were due to arrive on the world market from Central America. After that, Burundi can only add to the quantity on offer.

An official from the Uganda Coffee Trade Federation told Reuters that average Ugandan prices were unchanged from last week at around $350 below London (January). He said that performance was good in view of a declining global market and time of year.

At Kenyas auction, premium grade ABs were around $40 over New York March while AAs were around $50 over New York March.

A trader said, Higher prices will continue due to reduced quantities until the main crop starts in January.

With the main Zairean crop not due until December, traders in London said last week there was no cause for panic yet but supplies could be threatened if chaos persisted.

At this stage, no one is sure whether the situation in (eastern) Zaire is really going to affect the whole of Zaire itself, said Lawrence Eagles, the head of research at UK brokerage GNI Ltd.

The eastern Zairean towns of Goma, now in rebel hands, and Beni are two major grading centres for Zairean coffee.