Although the east African nation is a relatively small producer compared with other growers like Ethiopia and Uganda, its specialty beans are famous for their high quality and are sought after for blending.

The Nairobi Coffee Exchange said in its weekly report that grade AA sold at $489-$259 per bag at its sale held on Tuesday from $512-$261 last week.

Traders said the prices eased in line with those of arabica in New York, whose futures fell on Monday and Tuesday.

"The trend on the futures market is lower, and that obviously is being reflected in the bid levels in the auction," said a trader at a leading export company.

"A lot of it isn't being sold, because as the terminal market comes lower, and the trend is down, the farmers are finding it difficult to accept the ever-decreasing prices."

Grade AB fetched $431-$273 per bag, compared with $428-$154 at the last sale. NCE said 23,605 bags were offered, with 5,801 sold for a total $1.9 million, at an average price of $269.96 per bag. Last week, 25,213 bags were offered, with 6,869 being bought at a total value of $2.3 million, and an average price of $271.56 per bag.

Traders said most of the unsold coffee was just being noted, with the possibility of being sold before the next auction, but otherwise would be offered at future sales.

"What's actually been happening is that most of the coffee gets noted and then sold the next day. But a lot of it isn't being sold," the trader the export company said.

"If it's noted, the farmer can agree to sell it at the noted price, or ask for a higher price and then the dealer has the option to accept that, or not, and it stays unsold and appears in another auction."

Regulator Coffee Board of Kenya said in November it expected coffee output to rise 6 percent in the October 2011-September 2012 crop year to 54,000 tonnes.