* Prices remain close to record highs
* Quality poor, typical of end-season harvest
Tanzania's coffee prices fell slightly at its latest auction last week due to the poor quality of beans nearing the end of the harvest season, but traders said on Tuesday that demand remained high.
The price of top-grade coffee harvests has eased only slightly from the all-time high fetched towards the end of January.
Tight supplies have forced the state-run Tanzania Coffee Board (TCB) to reduce the coffee auction to every two weeks from weekly.
"Prices haven't changed much in the past few auctions, although end-of-season coffee beans are usually of low quality. This shows there is still strong demand for Tanzanian coffee in the market," Athanasio Massenha, commercial manager at the Kilimanjaro Native Cooperative Union, told Reuters by phone from Moshi, where the auctions are held.
"Exporters still have obligations to fulfil. I also personally have a few orders myself that I am confident of meeting."
TCB said more than 96 percent of the total estimated production for the 2010/11 (June-April) season had already been sold.
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 a few auctions left before the coffee season officially comes to a close.
"Many farmers are now doing stock clearance for the few remaining bags of coffee that they still have after having already sold most of their harvests," said a trader at a leading coffee exporting company.
TCB forecasts Tanzania's 2010/11 (June/April) crop to come in at 55,000 tonnes, up from 36,000 tonnes in the previous season.
"Overall average price at Moshi exchange for mild arabica was down by $4.39 per 50 kgs compared to the last auction," TCB said in its report.
"Average prices for arabica and robusta were above the terminal market by $3.82 and $7.35, respectively, per 50 kgs."
East African coffee is normally packed in 60-kg bags, but prices are quoted for quantities of 50 kg.
Benchmark grade AA sold at $248.80-$332.80 per bag, compared with $235.60-$329.40 per bag previously. The average price was $294.14 per bag, down from $308.22 previously.
Grade A fetched $240.00-$310.00 per bag, compared with $249.80-$311.00 per bag at the previous sale, and got an average price of $295.86, up from $286.21 previously.
TCB said 12,348 60-kg bags were offered at the latest sale and 11,006 bags were sold. At the previous sale, a total of 10,715 60-kg bags were up for sale, with 10,422 bags sold.
The auction was held on Thursday and TCB issued the results on Tuesday.
PRICE (dollars)
GRADE OFFERED SOLD LOW HIGH AVERAGE
AA 2,508 2,361 248.80 332.80 294.14
A 2,819 2,377 240.00 310.00 295.86
B 3,911 3,443 215.00 310.00 287.63
PB 850 773 200.00 275.00 248.26
C 1,436 1,228 200.00 278.00 256.74
ROBUSTA FAQ 824 824 94.80 98.00 96.75
source: https://portal.hpd.global.reuters.com/auth/login.aspx
