Dar es Salaam — Coffee prices fell by an average of 15 per cent at the world market during the year to September 30, 2018 compared with the previous year.
The Bank of Tanzania's economic review for October attributes the drop to increased supply, mainly from Brazil whose harvest was bumper. The review shows that Robusta coffee prices decreased to $1.93 a kilo during the year to September 30, 2018 from $2.28 the previous year.
Arabica coffee prices also fell to $2.96 a kilo from $3.52 during the same period.
Coffee prices declined because production in Brazil, Colombia and Vietnam rose.
Brazil remains the largest coffee exporting nation, however Vietnam tripled its exports between 1995 and 1999 and became a major producer of robusta seeds. Indonesia is the third-largest coffee exporter overall and the largest producer of washed arabica coffee. Organic Honduran coffee is a rapidly growing emerging commodity owing to the Honduran climate and rich soil.
In 2013, The Seattle Times reported that global coffee prices dropped more than 50 per cent year-over-year. The downward trend continued, and in September 2018 coffee futures dropped to a 12-year low, below the cost of production for many farmers in mountainous regions who cannot use mechanized harvesting methods.
On a monthly basis, the report showed that Robusta coffee prices declined to $1.69 a kilo on September 30, this year from $1.78 the previous month.
Arabica coffee prices fell to $2.67 a kilo from $2.76 during the same period. On Tuesday, Tanzania Coffee Board acting director general Primus Kimaryo projected the crop production to reach 60,000 tonnes in 2018/19 from 41,679 tonnes in 2017/18.
He said: "We have been missing our production targets in the recent two years but the situation seems to be improving." He told The Citizen the highest production was recorded in 2013 when 71,319 tonnes were harvested.