Online coffee auction attracts entrepreneurs

NAIROBI, Kenya -- It didn't seem right to the two young Kenyans that while they paid $4 at a U.S. Starbucks for a latte made of Kenya's finest AA arabica coffee, farmers back home were uprooting trees because there was no money in the crop.

So Titus Gitau, 34, and Stephen Njukia, 38, went to work on a way to get a better price and prompt payment for farmers in eastern Africa who grow the specialty coffees prized by connoisseurs and trendy coffee shops in America, Europe and Japan.

"When we looked at prices of a cup of Kenyan coffee in the United States and we saw farmers uprooting coffee here, then we realized there has to be something in between," Gitau said.

After the world's first Internet coffee auction was held in Brazil in 1999, they were confident African coffee producers and exporters could offer their product to the world in the same way.

"The essence of our plan is to create the premier Internet commodity exchange to support trade in African soft-commodities such as tea, coffee, cocoa and macadamia," Gitau said.

Working with the Specialty Coffee Association of America, the two helped set up the East African Fine Coffee Association. They held their first auction in April on africanlion.com, their online exchange.

Ueshima Coffee Co. of Japan paid $453 each for two of 167 bags weighing 110 pounds each -- $106 more than the same coffee earned on the traditional trading floor at Nairobi's weekly auction.

Only 3 million of the 114 million bags of Kenyan coffee sold last year were classified as specialty -- a quality determined by the soil, altitude, rainfall and temperature where the coffee is grown.