Tanzania coffee prices rise, demand seen high

Fri Aug 24, 2012 1:21pm EDT

* Supply increases, quality of beans improves
    * Next auction to be held on Aug. 30

    By Fumbuka Ng'wanakilala
    DAR ES SALAAM, Aug 24 (Reuters) - Tanzania's robusta coffee
prices rose at auction this week, buoyed by continued strong
demand and an improvement in the quality of beans supplied to
the market, the regulator Tanzania Coffee Board (TCB) said on
Friday.
    State-run TCB said 32,435 60-kg bags were offered at the
latest sale, of which 28,595 bags were purchased. At the
previous sale, a total of 22,367 60-kg bags had been offered and
20,605 bags sold.
    "There has been an improvement in the quality of coffee
supplied to the auction this week, and this has been reflected
by the increasingly high prices that the coffee bags fetched at
the latest sale," Primus Kimaryo, director of quality and
promotion with the state coffee board, told Reuters.
    "Traders were very competitive in the auction, with some of
them looking to cover their short positions. We have seen that
demand for robusta coffee has still remained very high."
    Traders snapped up all the robusta coffee on offer at the
auction.
    Tanzania, Africa's fourth-largest coffee producer 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.
    The TCB expected the 2012/13 (June/April) crop to rise to
55,000 tonnes from around 32,000 tonnes in the previous season.
    "The overall average price at the Moshi exchange was up by
$1.43 per 50 kg for mild arabica and up by $5.43 per 50 kg for
robusta compared to the last auction," TCB said in a report on
the sale held last week.
    "Average prices were below the terminal market by $1.77 per
50 kg for mild arabica, while robusta was above the terminal
market by $14.43 per 50 kg."
    East African coffee is normally packed in 60-kg bags, but
prices are quoted for quantities of 50 kg. 
    Benchmark grade AA sold at $138.00-$210.00 per bag, compared
with $164.00-$188.00 per bag previously. The average price was
$173.35 per bag, down from $175.05.
    Grade A fetched $164.00-$181.20 per bag, compared with
$164.00-$180.00 per bag at the previous sale. The average price
fell to $168.03 from $170.09.
    The auction was held on Thursday and TCB released the
results on Friday.
    The next auction will be held on Aug. 30.

                              PRICE (dollars)
 GRADE
                       OFFERED  SOLD   LOW    HIGH    AVERAGE
AA                     6,690   6,293  138.00 210.00   173.35
A                      6,558   5,865  164.00 181.20   168.03
AB                       881     516  164.00 171.20   168.95
B                      5,613   4,768  161.00 180.20   164.03
PB                     2,255   2,034  160.00 169.80   164.16
C                      1,203   1,203  134.00 152.00   143.56
ROBUSTA ORGANIC        1,079   1,079  110.80 114.20   112.51
ROBUSTA OVER SCN 18      360     360  111.20 111.20   111.20
ROBUSTA SUPERIOR       2,519   2,519  103.60 109.00   106.54
ROBUSTA FAQ            3,598   3,598  100.00 102.20   100.80
ARABICA ORGANIC          240      -      -      -        -
ARABICA FAQ            1,439     360  138.00 138.00   138.00

 (Editing by George Obulutsa and Jane Baird)
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