Tanzania's coffee prices fell at last week's auction due to poor quality produce as farmers in the east African nation sell their last remaining harvests of the season, traders said on Tuesday.
A few bags of top-grade coffee continued to fetch record high prices, but most of the coffee on offer was of low quality.
"The main reason for the decline of prices is that the coffee on auction was generally of low quality. The average lot size was just 16 bags, while the normal standard is 100 bags per lot," said a trader at a coffee exporting company in Tanzania.
"There was a lot of low grade coffee on offer and the warehouses are cleaning out the last bits of coffee because this is the end of the season. We will have one more auction on the April 21 and another on the 5th of May and I think that's it for the season."
Traders said there was slack demand for Tanzanian coffee because of quality concerns over season-end beans.
Tanzanian coffee had been attracting high prices in the past few months as the country's current season heads to an end in April/May.
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.
There was no robusta on offer at last week's auction. Traders said there is limited supply of high-quality coffee at the auctions.
"Most of the coffee offered was of ordinary quality as we are closer to the end of season 2010/2011," TCB said in its report.
TCB forecasts Tanzania's 2010/11 (June/April) crop will come in 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 $17.57 per 50 kgs compared to the last auction," TCB said.
"Average prices for arabica were below the terminal market by $3.53 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 $248.40-$340.60 per bag, compared with $274.40-$316.80 per bag previously. The average price was $292.79 per bag, down from $310.76 previously.
Grade A fetched $200.00-$311.00 per bag, compared with $200.00-$309.00per bag at the previous sale, and got an average price of $285.29, down from $292.40 previously.
TCB said 6,735 60-kg bags were offered at the latest sale and 5,558 bags were sold. At the previous sale, a total of 9,20560-kg bags were up for sale, with 7,622 bags sold.
The auction was held on Friday and TCB issued the results onTuesday.
Source : Reuters
