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February 16, 2012

Tanzania’s Arabica coffee prices rise as season nears end

by Fumbuka Ng'wanakilala

Tanzania's Arabica coffee prices rose at last week's auction, helped by demand from exporters as Robusta coffee stocks began to run out, traders said on February 14.

State-run Tanzania Coffee Board (TCB) said 16,610 60-kg bags were offered at the latest sale and 11,707 bags were sold. At the previous sale, a total of 10,454 60-kg bags were up for sale, with 9,875 bags sold.

No Robusta coffee was on offer as stocks start to diminish.

"Prevailing high demand for coffee is pushing up prices at the auctions. Robusta coffee stocks are almost entirely depleted," said a trader at a coffee-exporting company based in the northern Tanzanian town of Moshi.

Market participants said a rise in world prices last week also drove local prices higher.

"There is good demand for coffee from northern parts of the country. The supply of coffee from southern Tanzania has started to diminish," said Elia Mkwawa, an auctioneer at TCB. "There are about two or three months left until we come to the end of this season ... We expect coffee growers to continue to enjoy good prices in the coming auctions."

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 up by $5.55 per 50 kg for mild arabica compared to the last auction," TCB said.

"Average prices were below the terminal market by $10.18 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.


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