29 November 2012

Tanzania: Coffee Supply At Moshi Auction Market Rises

COFFEE supply at the Moshi Exchange increased to 30,957 bags during last week's trading session, up from the 28,497 bags of the previous auction, because of a significant rise in the overall average prices for both Mild Arabica and Robusta.

According to the auction results posted by the Tanzania Coffee Board (TCB), a total of 23,340 bags weighing 60 kilogrammes each were sold at the market session, higher than 17,807 sacks procured in the previous deal.

The overall average prices at Moshi exchange were up by 0.09 US dollars (about 144/-) of a 50 kgs bag for Mild Arabica while Robusta went up by 16.81 US dollars of 50 kgs bag (about 26,896/-) compared to the previous auction.

"However, the average prices were below the terminal market by 0.71 US dollars (about 1,136/-) of a 50 kgs case for Mild Arabica while Robusta were above the terminal market by 9.80 US dollars (about 15,680)for a 50 kgs sack," stated the TCB report.

Prices for the locally produced coffee have been volatile due to competitions exerted by large scale producers in the international market, leading to falling farmers' earnings. The situation has led to some farmers abandoning coffee production for failure to get the expected returns.

Recently TCB said that the bumper coffee harvests expected in Brazil of about 50 million bags as compared to 45 million sacs last season is among the reasons behind the increased market supply that could definitely lead to price fall.

Likewise, Columbia is expected to have premium crop of high output, where Tanzania coffee belongs to the same group. Tanzania, Africa's fourth largest coffee producer 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 their cue from London. The New York (NY C) December delivery were down by 2.40 cents US dollar (about 3,840/-) equivalent to 2.65 US dollars (about 4,240/-) for a 50 kgs bag Freight on Board (FOB) and London International Financial Futures And Options Exchange (LIFFE) market.

January delivery was down by 32 US dollars (about 51,200/-) per metric tonne equivalent to 1.60 US dollars (about 2,560/-) of a 50 kgs bag FOB compared with the auction held in the previous auction. The next auction will be on December 29, 2012.

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