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Out of Africa.

African producers concerned about world coffee market

African coffee producers, who have seen the continent's share of world exports drop from around 30% in the 1970's to a current level of about 24%, due to drought, war and poor marketing techniques, are becoming concerned with the situation and plan to launch an ambitious export drive to win new markets in Eastern Europe in order to regain lost market share in world trade.

Speaking at the annual general assembly of the 25-nation Inter-African Coffee Organization (IACO) in Arusha in northern Tanzania, Stephen Kibona, the country's Finance Minister, said that the changed political and socio-economic systems in the former communist countries of Eastern Europe present potential future coffee markets. African countries had to mount a vigorous promotional campaign in order to have a share in that market.

The week-long Arusha meeting worked out details of proposals to re-introduce export quotas, review sales arrangements and prices and, above all, boost Africa's exportable output to regain lost market share in the world coffee trade.

Kibona said that African producers who previously earned more than US$3 billion a year from coffee exports were down by US$1 billion since the ICO pact collapsed in July 1989 when producers failed to agree on fresh quotas.

The free market, which has subsequently prevailed, had made it difficult for Africa, with its poorer quality coffee, to compete with Latin American countries.

Kibona was convinced that IACO member countries could effectively compete in world markets by improving the quality of their coffee and stepping up effective marketing strategies.

IACO officials said that African producers were very united in making good progress towards the re-introduction of export quotas, but expressed doubt over whether other countries would be willing to make concessions, especially those that supported the Colombian plan, whereby coffee that was surplus to import requirements would be withheld by producing countries in order to balance supply and demand, leading to a stabilization of prices.

Brazil's insistence that it maintained its traditional market share of 30% did not help the situation.

African producing countries are desperately short of foreign currency and, hence, are anxious to export all the coffee that they produce.

The IACO plans to launch a campaign to promote consumption of coffee in member countries and also help boost the image of the continent's product.

Africans drink about one pound of coffee per head each year, compared to about 25 pounds in Scandinavian countries.

Kenya's record tea crop despite poor weather

Kenya's tea production rose from 197 million kg in 1990 to a record 202 million kg in 1991, despite below normal temperatures early in the year and clashes between different tribal groups, fighting for control of arable land.

A leading local brokerage firm, African Tea Brokers (ATB), reported that Kenyan exports increased by 3.0% from 178 million kg to 185 million kg over the same period. Local consumption accounted for 17 million kg in 1991.

The figures are encouraging because they ended earlier fears that production would fall due to soaring input costs and poor infrastructure - bad conditions in the fields, poor roads and lack of factory capacity.

Clashes between tribal groups in the tea-growing areas of western Kenya, where pressure on land is high, also threatened production.

ATB reported that the Mombasa-based auction was the only international tea center to show a gain in average price levels in 1991 over 1990. All other markets showed declines, an Colombo in Sri Lanka and Jakarta in Indonesia were unremunerative to the extent that local producers were selling teas below the cost of production.

Tea exports earned US$252 million in foreign currency for Kenya, ranking second behind tourism's US$400 million.

ATB reported that price levels for Kenyan teas during 1991 showed little fluctuation when compared to the previous year.

The range in 1991 was only KSh5.42 (US$0.19) per kg compared to KShll.46 (US$0.50) per kg in 1990.

Tea seems to be the one bright prospect in Kenya's economy with the fall in the coffee price and drop in tourism levels affecting Kenya's other two main foreign currency earners.
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Title Annotation:state of coffee and tea industries in Africa; effort to boost coffee exports with focus on Eastern Europe; Kenya shows record tea production
Author:Kille, Turville
Publication:Tea & Coffee Trade Journal
Date:Jun 1, 1992
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