November 14, 2011 / 1:29 PM / in 6 years

Tanzania arabica coffee prices rise, seen peaking

DAR ES SALAAM (Reuters) - Tanzania’s arabica coffee prices rose at last week’s auction helped by output shortages in Colombia, with supplies of the beans seen peaking, the regulator Tanzania Coffee Board (TCB) said on Monday.

A file photo of coffee bags. Tanzania's arabica coffee prices rose at last week's auction helped by output shortages in Colombia, with supplies of the beans seen peaking, the regulator Tanzania Coffee Board (TCB) said on Monday. REUTERS/Alberto Lowe

Tanzania mainly produces arabica coffee and grows some robusta. Prices of its arabica normally track the New York market while those for robusta take their cue from London.

State-run TCB said 24,789 60-kg bags were offered at the sale with 23,058 bags sold. A total of 19,706 bags were up for sale in the previous auction, with 18,247 bags sold.

“Overall average prices at the Moshi exchange were up by $1.0 per 50 kg for mild arabica and down by $2.74 per 50 kg for robusta compared to the last auction,” TCB said in its weekly report.

Market players said the volume of arabica coffee supplied at last week’s auction increased against the previous sale.

“There are queues of coffee bags at curing houses waiting to be processed and brought to the weekly auctions,” said a trader at a coffee exporting company based in the northern Tanzanian town of Moshi.

“Arabica coffee output is now peaking, while prices and supply of robusta coffee have started a downward trend.”

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

TCB said coffee prices in New York were up last week by $6.55 per 50 kg, while London prices fell by $1.70 per 50 kg.

“Average prices were above the terminal market by $29.73 per 50 kg and 18.52 per 50 kg for mild arabica and robusta respectively,” said TCB.

The regulator said arabica prices were seen remaining high in the coming auction due to supply deficits at New York markets.

“Prices of arabica coffee will continue to remain high in the coming auctions because leading producers such as Colombia are short on output,” Primus Kimaryo, director of quality and promotion at the state coffee board, told Reuters.

Benchmark grade AA sold at $245-$341 per bag, up from $246-$315 per bag previously. The average price was $284.22 per bag, up from $283.37 previously.

The average price for Grade A rose to $280.03 from $276.80 previously. The newly introduced grade AB got an average price of $279.02, up from $278.63 previously.

TCB forecasts the 2011/12 (June/April) crop will fall to 45,000 tonnes in the continent’s fourth-largest coffee grower -- after Ethiopia, Uganda and Ivory Coast -- from 56,247 tonnes in the previous season.

The auction was held on Thursday and TCB issued the results on Monday. The next auction will be held on November 17.

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