SEP. 28, 2015–The average prices of Tanzania’s mild Arabica and Robusta coffee beans rose during the last auction, which was held last week in Moshi.
Tanzania Coffee Board (TCB) data show that the overall average price of mild arabica were up by US$2.23 per 50-kilogramme bag and robusta by US$4.57 per bag at the September 10 auction, compared with the previous sale on September 3.
A total 21,154 bags of mild Arabica were offered and 20,331 bags were sold. At the previous auction, a total 23,236 bags of mild Arabica were offered and 22,285 bags were sold.
All 483 bags of robusta offered were sold at the auction, while all 3,007 bags of robusta offered were sold at the previous sale. The weekly auction took a recess in March due to a decline in volume and resumed on July 27.
The next auction will be held on today. Tanzania uses New York ICE futures as its benchmark for arabica prices and London’s Liffe market for robusta prices.
Tanzania exports nearly 98 per cent of all its coffee output, which averages 50,000 tonnes annually. Most of the coffee is exported to Japan, the European Union and the US but plans are underway to increase market in East Asia, especially China.
In 2014, annual production was 40,000 tonnes but TCB projects the output to reach 61,000 tonnes this year. The country plans to raise production by 60 per cent in 2016.
According to Director General Adolph Kumburu, the current output levels are far below the 80,000 tonnes spelled in the 10-year Tanzanian Coffee Industry Development Strategy.
The TCB chief attributes this to mostly bad weather, smuggling and issues related to pesticides. However, farmers have been abandoning the crop and growing others because of the low prices coffee fetches.
“The strategic plan sets out the mission to increase coffee production from the present average of 50,000 tonnes to at least 80,000 tonnes by 2016 and reach 100,000 tonnes by 2021,” reads the blueprint, which was launched in 2011.
“It is envisaged that the increase in production volumes will go hand in hand with increase in quality from the present 35 per cent premium coffee to at least 70 per cent of the total production.”
TCB says increased production will be reached through improvement of productivity, suppressing unnecessary intermediaries and diminishing transaction costs.
Coffee is one of Tanzania’s primary agricultural export commodities accounting for about five per cent of total exports value, and generating export earnings averaging US$100 million per annum over the last 30 years.
Latest Bank of Tanzania figures show that the country exported 45,700 tonnes of the crop during the year ending June 2015 compared to 49,700 in the corresponding period last year.
The amounts earned the economy $148.8 million and $126.7 million in foreign exchange respectively.
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