Tanzania arabica coffee prices fall

Farmers sort out coffee beans
Tanzania's Arabica coffee prices fell at last week's auction, taking their cue from the New York market, with some traders saying a worsening of the euro zone debt crisis could hit Europe's demand for the commodity.   

State-run Tanzania Coffee Board (TCB) said 11,908 60-kg bags were offered at the latest sale and 7,534 bags were sold. At the previous sale, a total of 18,616 60-kg bags were up for sale, with 15,280 bags sold.  

No robusta coffee was on offer due lack of supply.  

"Prices have been fluctuating up and down ... the trend has generally been bad, because our biggest coffee buyers in Europe are in an economic crisis," Geoffrey Mwangulumbi, executive director of the Association of Kilimanjaro Specialty Coffee Growers, told Reuters. 
"Many European countries have already signed a pact (for fiscal measures), so this might restore hope on the futures of these countries and trigger stronger demand for coffee over the coming weeks and months." 
Market participants said there was a poor take-up of coffee on offer at last week's auction due to a slowdown in global demand.  

"Local coffee growers were not all encouraged by last week's auction prices in comparison with the previous auctions at the start of this year," said a trader at a coffee-exporting company based in the northern Tanzanian town of Moshi.      

Tanzania, which is Africa's fourth-largest coffee grower after Ethiopia, Uganda and Ivory Coast, produces mainly Arabica and some robusta coffee. Prices of its arabica normally track the New York market, while those of robusta take direction from London.    
TCB expects the 2011/12 (June/April) crop to fall to 45,000 tonnes from 56,247 tonnes in the previous season.      

"The overall average price at the Moshi exchange was down by $45.39 per 50 kg for mild arabica compared to the last auction,"
TCB said.     

"Average prices were below the terminal market by $6.57 per 50 kg for mild arabica."       

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

Benchmark grade AA sold at US$182.00-$270.00 per bag, compared with $206.00 $301.60 per bag previously. The average price was $251.42 per bag, down from $283.74 previously.   

Grade A fetched $191.20-$261.00 per bag, compared with $203.00-$283.00 per bag at the previous sale, and got an average price of $245.46, down from $273.63 previously.  

The auction was held on Thursday and TCB issued the results on Monday. The next auction will be held on February 2.
                                 PRICE (dollars)    
               OFFERED     SOLD      LOW      HIGH     AVERAGE      
AA               3,048     1,787     182.00   270.00    251.42      
A                1,402       647     191.20   261.00    245.46      
AB               4,288     2,668     180.00   269.00    220.21      
B                  966       683     185.20   259.20    243.69      
PB               1,285       864     172.00   253.00    205.83      
C                  919       885     164.60   223.20    170.55      
Source: Reuters,af.reuters.com, reported by Fumbuka Ng'wanakilala—Dar es Salaam

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