DAR ES SALAAM, March 25, 2011 - Tanzania's coffee prices fell at this week's auction, weighed down by slacking demand on poor quality beans and tracking lower prices in the global market, traders said on Friday.
Supply of top-grade coffee beans is declining as Tanzania's harvest season for the crop edges towards its end.
"Coffee prices declined both on poor quality as we arereally drawing to the end of the season, and the terminal marketalso came off," said a trader at a leading coffee exportingcompany in Tanzania.
"Some of the coffee bags presented at the auction were withdrawn several times because there is no interest frombuyers. Farmers think it's worth more, but the coffee beans areseveral months old and are losing quality."
Traders said they expect average coffee prices to continue to fall in the few remaining auctions of the season.
Tanzanian coffee had been attracting high prices in the past few months as the country's current season headed to an end in April.
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.
Traders said there were few remaining supplies ofhigh-quality coffee at the auctions.
"The current coffee season will soon come to a close and resume in August when a fresh season starts. So, trade is a bit slow at the moment," Athanasio Massenha, commercial manager atthe Kilimanjaro Native Cooperative Union, told Reuters by phonefrom Moshi.
"Coffee beans from high-altitude areas in northern Tanzania are of excellent quality and thus attract high prices. But, there is little of it left at the moment, while almost all the coffee coming from southern parts of the country has been soldout."
TCB forecasts Tanzania's 2010/11 (June/April) crop to comein at 56,000 tonnes, up from 36,000 tonnes in the previous season.
"Overall average price at Moshi exchange for mild arabica was down by $10.14 per 50 kgs and robusta down by $11.74 per 50kgs compared to the last auction," TCB said in its report.
"Average prices for arabica and robusta were above theterminal market by $8.31 and $7.22 respectively per 50 kgs." East African coffee is normally packed in 60-kg bags, butprices are quoted for quantities of 50 kg.
Benchmark grade AA sold at $274.40-$316.80 per bag, compared with $224.80-$350.00 per bag previously. The average price was $310.76 per bag, down from $327.93 previously.
Grade A fetched $200.00-$309.00 per bag, compared with $235.00-$342.00 per bag at the previous sale, and got an average price of $292.40, down from $317.29 previously.
TCB said 9,205 60-kg bags were offered at the latest sale and 7,622 bags were sold. At the previous sale, a total of11,769 60-kg bags were up for sale, with 10,052 bags sold.
The auction was held on Thursday and TCB issued the results on Friday.====
