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Report Highlights:

Marketing year (MY) 2014 Tanzanian exportable coffee surplus will likely reach a record high of 960 thousand 60 kilogram bags, above MY 2012 and 2013 exports. FAS/Nairobi forecasts Tanzania’s coffee production to reach a record 1.2 million 60 kilogram bags. The government of Tanzania’s Coffee Industry Development Strategy (2011-2021) plans to double coffee output over the next years through extensive replacement of Tanzania’s ageing tree stock with improved varieties, among other initiatives discussed in the policy section of this report. 

Production: 

FAS/Nairobi forecasts an increase in both Robusta and Arabica coffee production in MY 2014 in response to favorable world prices, continued government-supported coffee production expansion programs, and improved crop husbandry practices. In addition, production will be on the higher side of the biennial coffee production cycle (that is, emerging from the low biennial coffee production cycle).

Consumption:

The Tanzania Coffee Board (TCB) estimates coffee consumption rate to be growing at an annual average rate of between 1.5 and 2 percent. Like in Kenya and Uganda, coffee shops have opened in the major cities (Dar es Salaam, Arusha, Dodoma, etc.). However, domestic consumption still remains low. Most Tanzanians prefer tea to coffee. Thus, majority of the coffee farmers heavily depend on the export market for business. 

Trade: 

Italy took the lead as the largest importer of Tanzania’s Robusta coffee mainly used to make expresso coffee. Japan remains the lead importer for Arabica coffee, followed by German, Belgium, and the United States. Tanzania’s “Kilimanjaro” brand is preferred in Japan’s coffee specialty market, while Peaberry coffee from Mount Kilimanjaro and Mount Meru is preferred in the U.S. specialty market. Opportunity exists for Tanzania’s specialty coffee market if production and processing are improved. Tanzania’s processed coffee lacks quality consistency most of the times, thus, posing problems to international buyers. Because of this, most of the exported coffee ends up in blends.

Policy: 

In the recent past, the government of Tanzania unveiled the Tanzanian Coffee Industry Development Strategy, 2011-2021. The strategy sets four goals namely: 

• Increased productivity; to increase annual clean coffee production from the present average of 50,000 metric tons to at least 80,000 metric tons by year 2016 and 100,000 tons by year 2021 ; 

• A better internal marketing and business environment (improved efficiency of the value chain) ; 

• Improved quality demonstrated by an increase in the share of coffee sold with price premiums on export markets from the present 35% of the total volume to at least 70% by 2012 ; and 

• The development of new markets through promotional campaigns abroad. 

According to the coffee industry development strategy, by 2021, success will be indicated by the following: 

• Average national coffee yield increased to reach at least 450 kg/ha of clean coffee per hectare (100% increase); 

• At least 10,000 ha of new coffee farms established; 

• Average share of transaction costs from farm gate to market (Free on Board [FOB]) reduced from current 35% to 25%; 

• By 2016, the average time needed to move coffee from farm to market reduced from three months now to two months or less; 

• At least 70% of the coffee produced in Tanzania is of grade 1 to 7; 

• A minimum of 75% of the Arabica coffee produced in Tanzania is processed through central processing units; 

• A minimum of 50% of the coffee produced in Tanzania is certified as “sustainable” (that is, UTZ, 4C, FLO, Rainforest, Organic certified); and 

• Domestic consumption is increased to reach at least 10% of production

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