STiR coffee and tea magazine

STiR coffee and tea 35 Elsewhere, coffee trade in Tanzania improved in recent past due to the streamlining of the three coffee marketing sys- tems of internal sales usually at the farm gate, auctions and di- rect exporting. For example, TCB recently introduced two new auction sites as part of the Board's plan to expand Tanzania's coffee marketing system. In addition, TCB also opened a Tan- zania Mercantile Exchange (TMX) for coffee, a move that could also reduce substantially the country's coffee held in stock to 520,000 bags as of 2021/2022. TCB says it will utilize the platforms of the TMX for coffee auctions hence making it possible for the Exchange to organize the auctions, fast-track the speed and efficiency of selling coffee in Tanzania according to USDA. Tanzania's coffee auction is dominated by companies with international outlook with four of the biggest coffee buyers in- cluding Ibero (T) Ltd, Taylor (T) Winch Ltd, Dorman (T) Ltd, and Cotacof Ltd purchasing 23%, 23%, 21% and 12% of the coffee on auction annually, an equivalent of almost 80%. Other active coffee companies in Tanzania coffee auction include Kagera Cooperative Union, Karagwe Estates Ltd, Amir Hamza (T) Ltd, CETCO Ltd, Mambo Coffee Ltd, and Olam (T) Ltd. Meanwhile, Tanzania now has a new law that allows pre- mium coffee producers "to establish direct contacts with over- seas buyers, engage with agricultural marketing and cooperative societies, and bypass auctions." The coffee exports market is dominated by Karagwe Dis- trict Cooperative Union, which accounts for 62% of the direct coffee exports in Tanzania. Other notable direct exporters of coffee include Kagera Cooperative Union Ltd, AVIV Tanzania Ltd, and Kaderes Peasant Development Ltd with an estimated share of 13%, 5%, and 2% respectively. "Coffee growers are now able to directly enter contracts with foreign buyers and eliminate middlemen, thereby increas- ing profitability for growers," says USDA report. "Foreign buy- ers often require growers to adopt practices such as stumping, pruning, weeding, mulching, and fertilizing to help ensure qual- ity production and as these practices proliferate in Tanzania, yields will rise." Tanzania's traditional coffee export markets remained Ja- pan, Germany, Belgium, and Italy with an import market share of 27%, 17%, 12%, and 10% respectively. Other buyers of Tanzania coffee include Morocco, US, Is- rael, South Korea, Russia, Spain, South Africa, India, Sweden, Canada, and Australia each with an export market share ranging from 1-6%. At the domestic market level, private companies such as Starbucks, City Coffee Ltd, and Taylor (T) Winch are support- ing the drive by Tanzania to achieve quality coffee output and an increase domestic consumption. During the 2021/22 coffee season, Tanzania's coffee ex- ports increased by 34% to 1.38 million bags "due to an increase in quality from improved marketing systems and relaxation of Covid-19 restrictions in Tanzania and neighboring countries." Demand for Tanzania's coffee is expected to increase in the short to medium term as the quality of the country's coffee con- tinues to improve partly due to the new law that allows buyers to work directly with growers and most of these international cof- fee takers are insisting on coffee that meets competitive global standards before signing of purchase contracts. "This is likely to increase international demand as coffee from Tanzania more closely aligns with consumer preferences from high-income countries which are often the biggest import- ers of coffee," adds USDA. The East African country, with a population of more than 60 million, earned an estimated US$135.1 million during the 2020-2021 coffee season from exporting green coffee beans. Although Tanzania's coffee industry is on a growth trajec- tory in the last few years, both the government, through TCB, and private stakeholders in the country's coffee sector, would have to combine efforts to address persistent challenges such as low use of fertilizers, underutilization of research findings, and inadequate opportunities in accessing credit for players in the coffee value chain if Tanzania's current coffee production, consumption and exports are to be maintained or better still, increased. Tanzania coffee farmer picking her crop. Tanzania coffee farmers demo. Credit: Royal Coffee. Credit: Coffee Partners.

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