Tanzania coffee prices fall as season reaches end

A coffee farmer
Tanzania has revised downwards its coffee output for this season and prices fell sharply at last week's auction, hurt by low quality beans at the end of the season and declining Arabica prices at the world market, the regulator said on Tuesday. 

The state-run Tanzania Coffee Board (TCB) lowered its estimate for the 2011/12 (June/April) crop to a yield of 35,500 tonnes, moving it further below the 56,247 tonnes of coffee produced in the previous season. 

 "We have revised our production forecast this season to 35,500 tonnes from 45,000 tonnes, as a result of lower-than-expected harvests," Adolph Kumburu, TCB's chief executive, told Reuters by telephone from Moshi in northern Tanzania.

"Prices fell at last week's auction due to inferior quality coffee beans, which are typical at this stage of the season. We expect the season to come to an end this March it won't extend to April-May."

TCB said 11,493 60-kg bags were offered at the latest sale, and 6,858 bags were sold. At the previous sale, a total of 8,865 60-kg bags were up for sale, with 3,556 bags sold.

At the peak of Tanzania's coffee season, an average of 20,000 60-kg bags were offered for sale at each weekly auction.  Market participants said the supply and uptake of coffee at recent auctions was low due to the poor quality coffee beans on offer. 

"The season is now basically over the remaining coffee on offer is being sold at a discount because of poor quality," said one trader at a coffee exporting company based in Tanzania.

Tanzania, 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.  

"Overall average price at the Moshi exchange was down by US $12.01 per 50 kg for mild arabica compared to the last auction," TCB said.    

"Average prices were above the terminal market by $11.68 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 $152.00-$242.40 per bag, compared with $182.00-$256.20 per bag previously. The average price was $213.07 per bag, down from $233.23 previously.  Grade A fetched $151.00-$200.00 per bag, compared with $215.00-$215.00 per bag at the previous sale, and got an average price of $164.21, down from $215.00 previously.
Source: The Reuters,af.reuters.com, reported by Fumbuka Ng'wanakilala in Dar es Salaam 
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