By AGENCIES
TANZANIA coffee prices fell at auction on higher supply, but traders said strong demand for the commodity was expected to bolster prices over the coming weeks.
The Tanzania Coffee Board (TCB) said 22,367 60-kg bags were offered at the latest sale and that 20,605 bags got buyers. At the previous sale, a total of 14,120 60-kg bags had been offered for sale, with 12,618 bags selling.
"Farmers in northern Tanzania experienced low rainfall, but there is a lot of coffee right now being supplied to the market from the south of the country where there is a good harvest," Athanasio Massenha, commercial manager at the Kilimanjaro Native Cooperative Union, told Reuters on Tuesday.
"Overall speaking, our coffee growers are expected to enjoy favourable prices throughout this season."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.
The TCB expected the 2012/13 (June/April) crop to rise to 55,000 tonnes from around 32,000 tonnes in the previous season.
"The overall average price at the Moshi exchange was down by $14.74 per 50 kg for mild arabica and down by $10.76 per 50 kg for robusta compared to the last auction," TCB said in a report on the sale held last week.
"Average prices were below the terminal market by $2.21 per 50 kg for mild arabica, while robusta was above the terminal market by $10.44 per 50 kg."
East African coffee is normally packed in 60-kg bags, but prices are quoted for quantities of 50 kg. Benchmark grade AA sold at $164.00-$188.00 per bag, compared with $180.00-$202.00 per bag previously.
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