Overview of Coffee Industry in Tanzania

Coffee is one of Tanzanian’s primary agricultural export crops, representing about 5% of total exports, 24% of traditional cash crops and generating export earnings averaging US$ 100 million per annum over the last thirty years. More than 90% of Tanzanian coffee comes from smallholder farmers. The industry provides direct income to more than 450,000 farmer families and also benefits directly the livelihoods of about two million Tanzanians. The average year production over the past thirty years has stagnated at 47,000 metric tons characterized by biannual troughs and production has swung between 33,000 and 68,000 metric tons.

Trend of Tanzania coffee production

Since the mid-1990s, the country’s coffee industry has been in a state of stagnation or decline. The reasons for this are diverse. Falling world coffee prices have eroded profit margins and income of coffee growers, threatening livelihoods. Productivity is low because of lack of motivation to invest in inputs and improved crop husbandry, which in turn has affected quality and yields. Costs of production are high, thus further reducing competitiveness in the world market. Coffee trees as well as coffee growers are aging, and research, so essential for supporting a vibrant coffee industry, had been moribund for many years.

The world coffee market, after experiencing a period of strong prices from 1994 through 1999 that stimulate expansion in production, has entered a period of extremely weak prices, near 400 TZS/Kg in 2000/01 production season which was the lowest level since the early 1970s. The low prices reflect the increase in production in Brazil and Vietnam that has outpaced demand growth. Currently the stabilization of the world economy and increasing demand of coffee influence increase in price which is a major concern for coffee producers in Tanzania and all over the world. The average coffee price trend shows an increase of up to 2,500 TZS/Kg equivalents to 49% increase in 2010/11 production season compared with 2009/10 season. The Tanzania’s coffee production is likely to rise due to recent market conditions, existing physical capacity as well as technology levels such as dissemination of improved coffee varieties which are resistance to coffee berry disease (CBD) and coffee leaf rust (CLR) which is major constraints to Arabica coffee production in Tanzania.

Tanzanian’s coffee sector remains a vital part of the country’s diverse agricultural economy and is a key contributor to GDP, employment, and export earnings. However, the domestic consumption is still low with an average of 0.1 kg per capita compared with developed countries.

Type of coffee produced in Tanzania

The world coffee trade is mainly dominated by two types, Arabica and Robusta. Arabica represents approximately 65% of all coffee exports whereas Robusta represents approximately 35% of global export. Tanzania is endowed with abundant land with approximate altitude, rainfall and soil suitable for high quality Arabica and Robusta production released from an average land size of 0.5 hectares owned by smallholders. Average coffee production in Tanzania is 250 kg of clean coffee per hectare. Harvesting of ripe cherries is normally from July to December for Arabica and April to November for Robusta. The major Arabica growing regions are Kilimanjaro, Arusha, Mbeya, and Ruvuma Robusta in the Kagera region. Other growing regions include Tanga, Iringa, Morogoro, kigoma, Manyara, Mwanza, Rukwa and Mara. See Tanzania Coffee Baseline Survey Report 2005.

Marketing and export destination

Tanzania coffee is marketed via auction and direct sale (www.coffeeboard.or.tz, www.ico.org, and www.eafca.org). Most of the coffee from Tanzania is exported to Germany and Japan, (Arabica) and Italy, Belgium, and France (Robusta)