Tanzania coffee prices fall on poor quality

Tanzania coffee prices fall on poor quality : DAR ES SALAAM (Reuters) - Tanzania's coffee prices fell at this week's auction due to poor quality, with lower-grade beans accounting for around 60 percent of the amount on offer, the Tanzania Coffee Board (TCB) said. The supply of top grade AA and A coffee declined as Tanzania's harvest season for the crop edged towards its end.

"The ratio of the supply of coffee at the auction shows that high-grade coffee was below 50 percent of the total coffee sold. This affected the overall prices," said Primus Kimaryo, TCB director of quality and promotion at the state coffee regulator.

"We have already sold 92 percent of the total estimated coffee production for this season. We are at the tail end of the harvest, and coffee beans during this stage of the season tend to be of low quality."

Traders said they expect average coffee prices to be mixed in the remaining auctions until the end of the season in March-April.

"The prices could fluctuate in the coming auctions depending on the size of orders that exporters have committed themselves to supply to their clients," said a trader at a leading coffee exporting company.

"Most of the high-quality coffee beans for this season have already been sold. Exporters may scramble for the few remaining high-quality beans, and this could push prices back up."

TCB forecasts the 2010/11 (June/April) crop will rise to 55,000 tonnes in the continent's fourth-largest coffee grower after Ethiopia, Uganda and Ivory Coast, from 36,000 tonnes in the previous season.

"Overall average price at Moshi exchange for mild arabica was down by $13.59 per 50 kgs and robusta was down by $1.00 per 50 kgs compared to the last auction," TCB said in its report.

"Average prices for arabica and robusta were below the terminal market by $21.85 per 50 kgs and $6.00 per 50 kgs respectively."

East African coffee is normally packed in 60-kg bags, but prices are quoted for quantities of 50 kg.

Benchmark-grade AA sold at $162.00-$305.20 per bag, compared with $210.00-$318.80 per bag previously. The average price was $248.02 per bag, down from $262.82 previously.

Grade A fetched $160.00-$285.00 per bag, compared with $199.00-$282.80 per bag at the previous sale, and got an average price of $236.90, up from $261.35 previously.

State-run TCB said 10,764 60-kg bags were offered at the latest sale and 7,894 bags were sold.

Tanzania 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 auction was held on Thursday and TCB issued the results on Saturday. For the latest updates PRESS CTR + D or visit Stock Market news Today

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