State-owned Tanzania Agricultural Development Bank (TADB) is continuing to offer financial support to coffee cooperatives in the country facilitating the production and purchase of the crop.
Recently the bank issued Tsh27bn/- (US$11.6m) to four Lake Victoria Zone cooperative societies to buy coffee from Kagera and Mara farmers this season.
Kagera region is the main Robusta coffee producing area and contributes to about 30 per cent of the total coffee production in Tanzania.
The cooperative societies are Ngara Farmers’ Cooperative, Karagwe District Cooperative Union (KDCU), Kagera Cooperative Union (KCU) and Mara Farmers’ Cooperative Union (WAMACU).
The financing is part of Tsh.39.6bn (US$17m) the bank has set aside for funding the country’s coffee this season.
TADB Managing Director Mr. Japhet Justine highlighted that the farmers will now benefit from the reduced interest rates of 9 per cent from 12 per cent aimed at reducing costs and increase productivity for farmers
The United State of Agriculture Department on its Tanzania’s coffee annual report 2020 describes the coffee market as volatile and faces dramatic political hurdles and unstable policies.
The report forecasts an increase in production from 1.25 million bags in MY 2019/2020 to 1.35 million bags in MY 2020/2021 due to favorable weather conditions in all coffee growing areas and across the crop cycle.
The annual per capita coffee consumption in the country is 0.06 kg, and only seven percent of the country’s total coffee production is consumed domestically.
On the other hand, it forecasts a 16 percent decrease in the country’s total coffee export in MY 2020/2021 due to low quality, changes in the marketing system, and restrictions in movement due to COVID-19 outbreak.
There is no expected change in domestic coffee consumption due to consumer preference for tea, which comes in part due to the high price of coffee compared to the price of tea.