Kenya coffee hits new high at $1,022/bag

Kenya's benchmark AA coffee grade fetched a new all-time high of $1,022 per 50 kg on Tuesday, reflecting a trend of soaring commodity prices due to political upheavals in north Africa.

It's generally a shift in commodity prices because of the uncertainty in the Middle East, said Chris Ransley, managing director at the Ransley Coffee Company.

Kenyan coffee has been attracting high prices in the past few weeks also after unfavourable weather dried up supply.

Authorities warned that unseasonal rains in 2010 interfered with flowering and would cut output in the current October 2010 to September 2011 crop year, after a drop to 40,000 tonnes in the previous year.

Although Kenya is a small grower with less than 1 percent of global production, its beans are sought after to blend with those from other regions.

Only a few lots sold at the record high prices, however. The previous high hit weeks earlier was $1,011 per bag.

The average price for a bag of AA coffee rose to $506.62, a dollar more than levels the previous week, while the bottom price was $295, the Nairobi Coffee Exchange's said in a market report.

Prices of AB grade softened to $633-$290 from $656-$200 last week.

Only 8,822 bags of the 19,295 offered were bought for a total of $4.5 million.