Market Reports

Tanzania Coffee Board on track for 2021 target

Coffee production in Tanzania is growing. From the northern region’s famous coffee farms on the slopes of Mount Kilimanjaro across the southern belt of Mbeya and Mbinga, to the easternmost area of Bukoba, output has steadily been expanding during the past decade. And as world production has stagnated in all but a handful of producing countries, it’s welcome news to industry stakeholders across the market that the supply of beans from Tanzania is picking up. The government-run Tanzania Coffee Board (TCB) has said its target is to see total production stabilise at around 1.7 million 60-kilogram bags by 2021, while the ultimate goal is to see annual output at around 2.2 million bags in the next decade. “We have made great progress in the past 10 years. While this kind of expansion is never easy, we are very excited about how the development is coming along,” Adolph Kumburu, TCB’s Director General, tells GCR Magazine. “Ultimately, the official development strategy for the coffee industry is to increase the national coffee production and quality, in order to improve the incomes for the entire value chain, particularly coffee farmers.” The TCB has forecast production in the new 2014-15 harvest to reach a little over 1 million bags, or 61,000 metric tonnes, he says. This is up more than 52 per cent from the disaster crop in the 2013-14 cycle where a drought cut the harvest to 667,000 bags. But since 2005, Tanzania’s production has – with only a couple of exceptions – been steadily over 800,000 bags. In 2008-09, the country  even produced 1.2 million bags, the largest crop in Tanzania’s history, according to official data. “For the past 10 years we have really focused on expansion through a combination of adding new land and replanting old trees on existing land, but also by expanding the tree population on existing areas with more productive and resistant varieties,” says Kumburu. With the new varieties, existing Arabica yields of about 400 kilograms per hectare (6.5 bags) should gradually rise to about 1000 kilograms (16.7 bags), he says. Robusta yields of 600 kilograms (10 bags), meanwhile, are set to increase to 1.2 tonnes (20 bags) per hectare. Between 50 and 60 per cent of Tanzania’s coffee harvest in an average crop cycle is washed and natural Arabicas, mostly from the northern and southern regions, while the remainder is made up by Robusta coffee almost exclusively from the Bukoba region in the east.  The coffee board has distributed millions of new seedlings to producers across the growing areas. The seedlings have been selected from new disease-resistant and more productive varieties, developed at the Tanzanian Coffee Research Institute located near the coffee town of Moshi in the Kilimanjaro region. The smallholder sector has also received additional support through Public-Private Partnership projects (PPP). The biggest to date is the Coffee Partnership Tanzania project. Supported with US$8 million by the Bill and Melinda Gates Foundation, the project has since 2013 provided training to more than 40,000 coffee farmers in better agricultural practices, and targets to train a total of 85,000 farmers during the four-year project. The US Department of Agriculture (USDA) is optimistic about the results achieved to date, saying that the 2012-13 harvest produced 1.2 million bags, compared to the TCB’s figure of 1.017 million bags. The USDA has production in the current cycle pegged to increase to 1.15 million bags. “Improved global prices, government-supported expansion and rehabilitation programs, and good weather account for the expected increase in production,” said the USDA in its latest report on Tanzania. Giving credit to the government for the efforts made through the expansion plan, the USDA said exports in the 2014-15 year “are expected to hit a record high” of 975,000 bags. The Tanzanian crop year runs from July to June with peak harvesting taking place between July and October and exports primarily being shipped between September and February. The 10-year “Tanzania Coffee Industry Development Strategy” plan, which was initiated in 2011, aims at “increasing both productivity in existing farms and facilitating the private sector to put up new farms,” said the USDA. According to the plan, seen by GCR Magazine, the area under coffee will be increased by at least 10,000 hectares by 2021. “In Tanzania the talk has always been about the ‘potential’ for increasing output, but it always takes a lot longer than the government hope for,” says one private trader based in Moshi, who agrees that numbers are now rising and have further room to grow. “I do think the TCB can get to 80,000 and even 100,000 tonnes if the replanting continues, and if the new areas continue to grow,” he says. Much of this growth can be attributed to market-friendly policies launched at the turn of the millennium, allowing for private investment into Tanzania’s ailing coffee sector for the first time after 35 years of socialist-inspired policies. In the 1990-91 cycle, just before world production collapsed in the 1991-92 harvest year as a result of massive over production, Tanzania produced 932,000 bags of coffee. Since then output quickly declined and until 2004 production figures regularly came in between 612,000 and 624,000 bags, according to the International Coffee Organization. But with private investment kicking in, times are changing. For decades, it was a sad sight to coffee lovers to see row after row of abandoned and wilted coffee farms infested with weeds. Today, the view has been replaced by the beautiful sight of newly planted, bright green coffee trees. “We finished replanting the last part of the farm in 2010 and 50 per cent of the total area is still young coffee that is only just getting into producing full yields now. Production should continue to pick up in the coming years,” says Bente Luther-Medoch of the Machare Estate. Located right on the slopes of Kilimanjaro, the Machare estate was in 2004 among the first of formerly old state-run farms to be taken over by private investors from Germany and the UK. “When we took over the farm in 2000 it was completely run down and totally over-grown, so the first thing we did was start to replant the entire area,” she said. The replanting at the old and large estates such as Machare is one of the key arguments that gives Kumburu reason to believe the TCB’s ambitious goals are realistic. “In the southern area, Mbeya has already become a very big region, and both Mbeya and Mbinga are now leading the production out of Tanzania. It’s very good soil and there are a lot of new plantings taking place in the south at the moment because they don’t have any problems with the land,” says Kumburu. “In the northern region, because of the limitations of land available for expansion of the cultivated areas, the increase in production will be limited to replanting, but that should be able to take production to at least double of today, if not much more, because of the concentration of the big farms,” he adds. From new northern areas such as Mara and Tanga, to the central Tanzanian plains where the town of Iringa stretches along a hilltop overlooking the Ruaha River, coffee has started to emerge from regions that were not known as coffee lands until recently. Moving further south from Iringa, at roughly halfway toward Mbeya and Mbinga, coffee is also today starting to come out of Ruwka where the TCB has for a number of years been planting coffee with local farmers. And all the way to western Kigoma on the shores of Lake Tanganyika, coffee from Tanzania is today taking new form as the traditional coffee map is being re-shaped. “Now we have about 50,000 bags from Kigoma and we expect the region to grow to at least 85,000 bags once fully developed. These are small volumes, but from all of these new regions we are getting similar results and even if they are relatively unknown in the market yet, the quality is good and similar to the quality the market already knows from Tanzania,” says the TCB’s Kumuru, adding: “We know we are ambitious but we do think the overall goals are realistic.” GCR

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