Tanzania coffee prices rise with increased export demand

BY BUSINESS REPORTER

TANZANIA’S coffee prices rose at last week's auction buoyed by strong export demand, the Tanzania Coffee Board (TCB) said on Tuesday, and traders expect further increases in the coming weeks despite euro zone fears.    

State-run TCB said 21,359 60-kg bags were offered at the sale with 20,615 bags sold. A total of 29,333 bags were up for sale in the previous auction, with 23,097 bags sold. 

"Overall average prices at the Moshi exchange were up by $3.41 per 50 kg for mild arabica and up by $9.95 per 50 kg for robusta compared to the last auction," TCB said in its weekly report.    

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

"There is a supply shortage in the world market so demand for coffee will remain stable. This should push prices further up in January and beyond," Geoffrey Mwangulumbi, executive director of the Association of Kilimanjaro Specialty Coffee Growers said. 

"Japan, Germany, Italy, the United States, the United Kingdom, the Netherlands and Switzerland have traditionally been the main markets for Tanzanian coffee. If enough countries agree to changes in the EU treaty, this will bring stability and boost demand for our coffee.

Market participants said they expect coffee prices to remain firm due to strong demand for the commodity on the world market.        

"Europe is a key market, accounting for about half of the coffee exported from Tanzania. When the euro zone is in crisis, demand for coffee also suffers," said a trader at a coffee exporting company based in the northern Tanzanian town of Moshi.