DAR ES SALAAM (Reuters) - Tanzania's top coffee prices broke new ground at last week's auction, trading at a new season high as supply shortages continue to hit the world market, the Tanzania Coffee Board (TCB) said on Tuesday.
The price of benchmark grade AA coffee rose to a high of $338.00 per 50-kg bag from $305.20 per bag at the last sale on January 13.
The price for top grade coffee previously hit a season high of $318.80 per 50-kg in early January.
"The $338 recorded at this week's auction is the highest price so far this season. This reflects a decline in stocks at the terminal market," Adolph Kumburu, director general of TCB, told Reuters by phone from the northern Tanzanian town of Moshi where the weekly auctions are being held.
"The coffee prices will remain high at the coming auctions because consumption outweighs supply due to emerging new markets in the eastern bloc Asian countries such as China."
Tanzania 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 they were scrambling for a few high-quality coffee bags remaining in Tanzania's stocks before the season ends in March.
"A lot of exporters are struggling to fulfill their orders because there isn't enough top grade coffee in the market at the moment," said a trader at a leading coffee exporting company.
"Most of the available coffee is low grade because we are heading towards the end of the season, so the few top grade coffee left is bought at a premium."
TCB forecasts the 2010/11 (June/April) crop will rise to 55,000 tonnes in the continent's fourth-largest coffee grower after Ethiopia, Uganda and Ivory Coast, from 36,000 tonnes in the previous season.
Kumburu said 53,000 tonnes of coffee had already been harvested so far out of the total estimated production of 55,000 tonnes for the season.
"Overall average price at Moshi exchange for mild arabica was up by $2.00 per 50 kgs and robusta was up by $18.89 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 $4.63 per 50 kgs and $10.54 per 50 kgs respectively."
East African coffee is normally packed in 60-kg bags, but prices are quoted for quantities of 50 kg.
Grade AA sold at $201.00-$338.00 per bag, compared with $162.00-$305.20 per bag previously. The average price was $261.72 per bag, up from $248.02 previously.
Grade A fetched $200.00-$284.00 per bag, compared with $160.00-$285.00 per bag at the previous sale, and got an average price of $252.48, up from $236.90 previously.
State-run TCB said 11,882 60-kg bags were offered at the latest sale and 9,925 bags were sold. At the previous sale, a total of 10,764 60-kg bags were up for sale, with 7,894 bags sold.
The auction was held on Thursday and TCB issued the results on Monday.
PRICE (dollars)
(Source: http://af.reuters.com/article/investingNews/idAFJOE70O07S20110125?sp=true)
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