USDA Attache: Tanzania’s Coffee Production To Increase to 1.4 million Bags in 2021-2022, Exports Set to Skyrocket

USDA Attache: Tanzania’s Coffee Production To Increase to 1.4 million Bags in 2021-2022, Exports Set to Skyrocket 

Coffee Network (Bogota)- Tanzania’s coffee production in the coffee year 2021-2022 is expected to increase by 3.7% to 1.4 million 60-kg bags due to increased fertilizer use, improved extension services, and an anticipated high-producing period of the two-to-three-year yield cycle, the US Department of Agriculture said .  

Meanwhile, 2021/22 Tanzania’s exports are expected to increase by 34% to 1.38 million bags of 60-kg. This is due to an increase in quality from improved marketing systems and relaxation of COVID-19 restrictions in Tanzania and neighboring countries.  

Tanzania reports that it earned $135.1 million in MY 2020/21 from exporting green coffee beans. During this period, a total of 23 auctions were held in key coffee zones. This includes nine in Moshi, eight in Songwe, and six in the Mbinga and Ruvuma regions. Tanzanian coffee is largely exported to Japan, the United States, the EU, Morocco, Russia, South Korea, India, Australia, and South Africa. Tanzania also exports soluble coffee which is manufactured at a plant in Bukoba. 

Coffee growers are now able to directly enter contracts with foreign buyers to eliminate middlemen, thereby increasing profitability for growers. Foreign buyers often require growers to adopt practices such as stumping, pruning, weeding, mulching, and fertilizing to help ensure quality production. As these practices proliferate in Tanzania yields will rise. 

The quality of coffee in Tanzania is expected to improve in MY 2021/22 as buyers, many now working directly with growers, are expected to require higher growing standards as a condition to enter a contract. 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 importers of coffee.

Production 

Since 2011, Tanzania has implemented an initiative called the 2011-2021 Coffee Development Strategy (CDS) to increase coffee production among cooperatives. Part of the program provides growers with better access to fertilizer through securing loans from financial institutions. The program is now fully implemented and expected to increase coffee production in the country. Production is also expected to rise due to improved marketing systems. 

Additionally, many coffee-growing regions are expected to enter the most productive period of their crop-bearing cycle, increasing yields every two to three years.  

About two-thirds of Tanzania coffee is mild Arabica, followed by hard Arabica and Robusta. Crop Area Tanzania has abundant land in a climate zone suitable for producing both high quality Arabica and Robusta varieties of coffee. Coffee is produced under three systems in the country. These include pure stand/smallholder (mainly in the south), intercropped and bananas/smallholder (mainly in the north and west), and estate sector (mainly in the north and south).  

Ninety percent of Tanzanian coffee is produced by smallholder farmers, while 10 percent is produced by estates. Smallholder farmers often lack adequate resources and depend on family labor. 

 Tanzania Coffee Board Coffee is currently Tanzania’s most important cash crop. It accounts for 39 percent of land under permanent crop cultivation and is grown by more than 40 percent of farmers. Coffee is produced under a mixed cropping system in the country, and some farmers, especially those who own a lot of land, practice coffee mono-cropping. 

For typical farmers, land under cultivation varies between zero and 0.8 hectares, and an average of 0.63 hectares is dedicated for production. A typical grower raises between 389 and 1,962 trees which are 22 years old on average.  

Growing mostly occurs in the northern, western, and southern regions (see figure 1) with relatively no land or labor competition from other cash crops. Sources note that the Tanzania Coffee Board (TCB), a government agency that regulates coffee, has not conducted an inventory of coffee farms. An inventory would establish a database of farmers and areas under production, providing more reliable data to stakeholders. According to TCB, the total area of planted coffee exceeds 265,000 hectares. 

Consumption 

Domestic consumption is expected to remain at 50,000 bags. Consumers in Tanzania prefer to drink tea rather than coffee due to tradition and the high price of coffee relative to tea in local markets. Annual per capita consumption is 0.06 kg, and TCB reports that only 7 percent of total production is consumed domestically. TCB has started to promote local consumption as drinking coffee is a growing trend in urban and peri-urban areas.  

Stocks MY 2021/22 ending stocks are expected to decrease by 5.5 percent to 520,000 bags. Factors include increasing exports, marketing system improvements such as two new auction sites, the opening of a Tanzania Mercantile Exchange (TMX) for coffee, and a new ability for growers to directly export to foreign buyers. Tanzania opened two additional sites to auction coffee. These sites are expected to remove existing backlogs and increase sales. MY 2021/22 stocks are also expected to decline as TCB begins to use platforms of the Tanzania Mercantile Exchange for coffee auctions. When this happens, TMX is expected to organize auctions, increasing the speed and efficiency of selling coffee in the country. Tanzania also removed restrictions on directly exporting coffee to foreign buyers. In the past, buyers purchased coffee at an auction where it was hard to find high-quality beans and trace their origin. Currently, a new law allows premium producers to establish direct contacts with overseas buyers, engage with agricultural marketing and cooperative societies (AMCOS), and bypass auctions. This new system is expected to increase coffee sales and further contribute to decreasing stocks in MY 2021/22. In Tanzania coffee stocks are held by small-scale farmer’s cooperatives, farmer’s groups, traders, exporters, and large-scale coffee growers. Trade Exports MY 2021/22 exports are expected to increase by 34 percent to 1.38 million bags. This is due to an increase in quality from improved marketing systems and relaxation of COVID-19 restrictions in Tanzania and neighboring countries. The quality of coffee in Tanzania is expected to improve in MY 2021/22 as buyers, many now working directly with growers, are expected to require higher growing standards as a condition to enter a contract. 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 importers of coffee.  

Tanzania does not import coffee. 

 Policy 

 Tanzania implemented the Tanzania Coffee Industry Development Strategy (2011-2021) to address constraints facing the industry. The initiative is led by TCB and was developed in collaboration with coffee stakeholders in the country. It has four goals referred to as “thrusts” and 64 activities which include the following: (i) Increase coffee production and productivity (13 activities) (ii) Improve the efficiency of the coffee value chain (20 activities) (iii) Support overall coffee quality improvement (17 activities) (iv) Support the promotion of Tanzanian coffees abroad and explore new market opportunities including sustainable coffees (14 activities) The following results were reported during a mid-term evaluation in 2017.