Tanzania coffee prices rise, seen stable

02 | 11 | 2010

AGROINFO - Tanzania’s coffee prices rose slightly at this week’s auction, helped by strong demand and supply shortages on the world market, traders said.

Tanzania's coffee prices rose slightly at this week's auction, helped by strong demand and supply shortages on the world market, traders said.

The State-run Tanzania Coffee Board (TCB) said 36,990 60-kg bags were offered and 34,367 bags were sold. A total of 28,227 60-kg bags were offered at in the previous auction, with 27,531 bags sold.

"Overall average price at Moshi exchange for mild arabica was up by $0.54 per 50 kgs and robusta was up by $1.14 per 50 kgs compared to the last auction," TCB said in its weekly report.

Average prices for arabica and robusta were above the terminal market by $13.61 and $9.44 respectively per 50 kgs.

East African coffee is normally packed in 60-kg bags but the prices are quoted for quantities of 50 kg.

Benchmark grade AA sold at $225.00-$255.00 per bag, compared with $185.80-$260.00 per bag previously. The average price was $233.29 per bag, up from $231.67 previously.

Grade A fetched $221.00-$247.00 per bag compared with $199.00-$260.00 per bag at the previous sale and got an average price of $230.74, down from $231.27 previously.

Traders said there was strong demand for coffee at the auction. "Coffee prices have been rising in Tanzania since the start of this season's auctions in August in line with New York," said a trader at a leading coffee exporting company.

"We expect to continue seeing a good supply of coffee at the coming auctions. This should keep prices fairly stable."

Tanzania mainly produces arabica coffee and grows some robusta. Prices of its arabica normally track the New York market while those of robusta take their cue from London.

"There has been a problem on the availability of mild arabica at the world market. Stocks have been low at the terminal market, that's why farmers in Tanzania have been enjoying good prices," Adolph Kumburu, TCB director general, told Reuters.

"South American coffee is expected to come into the market in November. When that happens, we expect coffee prices in Tanzania to stabilise or fall. The upward trend will change."

TCB forecasts the 2010/11 (June/April) crop will rise to 55,000 tonnes in the continent's fourth-largest coffee grower after Ethiopia, Uganda and Ivory Coast -- compared with 36,000 tonnes in the last season.

Source: Reuters.

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