Kenya cancels weekly coffee auction over illegal sales

Kenya postponed its weekly coffee auction by two weeks citing a dispute over the illegal sale of bean samples, auction officials and traders said on Tuesday.

The east African country, a relatively small producer of specialty beans famous for their high quality and much sought after for blending, conducts a coffee auction every Tuesday.

The Nairobi Coffee Exchange (NCE) said some dealers were illegally selling samples - usually over and above the 50 kg per bag on sale - used for grading and tasting purposes.

Farmers are required to hand in representative samples weighing 14 kg per lot of coffee marked for sale to their respective marketing agents at least eight working days before a scheduled auction, according to existing regulations.

The NCE said some marketers declined to present the required weight of samples, hence the decision to cancel the session.

"We have trading rules that some traders chose to defy and we had to cancel today's auction in line with the rules. They failed to offer the right weight of coffee samples," Charles Mbaluka, chief executive of the NCE, told Reuters.

The auction was postponed to March 27, Mbaluka said.

Coffee is a key foreign exchange earner for the biggest economy in the region, earning around 26 billion shillings ($315 million) from exports of the commodity in 2010/11, up from 16 billion shillings a year earlier.

Kenya expects its coffee export earnings to rise by 7 per cent in the 2011/12 (Oct-Sep) season, buoyed by high international prices and increased volumes.