Tanzania coffee prices rise, shrug off recession worries

DAR ES SALAAM: Tanzania's coffee prices rose at last week's auction, with the upward trend likely to continue over the coming weeks despite recession fears in the U.S and the euro zone, the Tanzania Coffee Board (TCB) said on Saturday.

State-run TCB said 15,901, 60-kg bags were offered at the sale with 14,612 bags sold. A total of 19,079 60-kg bags were up for sale in the previous auction, with 16,073 bags sold.

All the 720 60-kg bags of robusta coffee on offer at the auction went unsold after traders refused to buy the commodity at prices demanded by suppliers.

"Overall average prices at the Moshi exchange were up by $3.47 per 50-Kgs for mild arabica compared to the last auction ... The robusta coffee bids were not confirmed at owners' reserve prices," TCB said in its weekly report.

"Average prices were above the terminal market by $30.03 per 50-Kgs and $3.44 per 50-Kgs for mild arabica and robusta respectively."

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

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

"The trend for last week was very positive in the sense that total average prices per 50 kilogrammes of coffee were well above the terminal market," Primus Kimaryo, TCB director of quality and promotion at the state coffee board, told Reuters.

"We were really worried about what was going to happen with these depression or recession fears in the U.S and Europe, but we are very pleased with the prevailing prices. The outlook for next week's auction is very positive."

Copyright Reuters, 2011