Business

Chinese envoy hails Tanzania’s strategies

Tanzania is on course to become the regional economic power house with its vast natural gas resources and major energy and infrastructure projects currently being undertaken, the Chinese Ambassador, Lu Youqing, has said. Chinese Ambassador to Tanzania, Mr Lu Youqing He said in Dar es Salaam on Wednesday that Tanzania would have the potential of becoming the regional centre for trade, manufacturing, logistics and IT upon completion of the major gas pipeline project this year and other mega electricity projects as well as the proposed construction of the Bagamoyo port. “China has strong confidence that Tanzania will develop to become the driving force in the East African region,” he said at an event to mark Chinese New Year organised in Dar es Salaam by Standard Chartered Bank. Tanzania is currently undertaking construction of a major 538km gas pipeline from Mtwara to Dar es Salaam which is scheduled to be completed this year. The 538km long pipeline is estimated to cost about US$1.2 billion which is funded through a concessional loan from the Export- Import Bank of China. Construction of a US$10 billion Bagamoyo Port project under financial support of Chinese government is also expected to take off this year. The new port project will also include construction of a railway network and special economic zone in Bagamoyo town. The Chinese envoy said Tanzania had the potential to become the regional centre of tourism due to rich tourists attractions including three out of seven wonders of the world. He said Tanzania will receive more tourists from China as the Asian economic powerhouse is the biggest tourist source country in the world. He said China would work with Tanzania to improve tourist infrastructure such as hotels and transport service to make it a top tourist destination. Mr Youqing said trade relations between Tanzania and China had continued to flourish with trade volume reaching US $3.7 billion annually. Tanzania is the biggest trade partner of Tanzania and is the second largest foreign investor. We are in every sector that is urgent…that needs to be developed… infrastructure, energy… everywhere you see Chinese investments. The envoy attributed the recent Chinese business and investments boom in Tanzania to a deliberate move to encourage Chinese businesses to establish big investments in Tanzania. Tanzania and China have strong bilateral and trade relations dating in the 1960s when China agreed to construct the Tanzania and Zambia Railway line from Dar es Salaam to Kapiri Mposhi, Zambia.

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Bad weather pushes up coffee prices in Tanzania

Tanzania’s robusta coffee yesterday fetched high prices at Moshi auction after reports over the production cut in Brazil following consistent dry weather since last month. In a telephone interview with the ‘Daily News’ from Moshi, the Tanzania Coffee Board (TCB) Director General, Mr Adolph Kumburu, said the prices jumped to 172.3 US cents per pound compared to 138 US cents. Prices of its Arabica normally track the New York market while those of robusta take their cue from London. “After the trading session, we noticed prices for robusta going up, due to reports that spread since early February that output in Brazil will drop,” he said. Brazil is the world’s largest producer of Arabica coffee beans, accounting for about a third of global coffee production of about 130 million bags per year. Mr Kumburu added: “If the situation in Brazil persists, it means Tanzania coffee prices will continue ticking up, with reflection on the increased income for the government, exporters and farmers.” He said there has been continued improvement in the quality of coffee supplied to the auction and this has been reflected in its competitiveness in the world market. He said further: “Our coffee is very competitive and has never failed to secure market in the world.” Increasing output has remained to be one of the challenges that have been facing domestic coffee production. The average production is 1 million bags annually, thus bringing little impact in the global output. Estimates from commodities analysts over coffee output in Brazil ranged as high as 60 million bags of coffee for this year’s harvest, though Brazil’s government crop unit Conab forecasted a crop of 46.5 to 50.2 million bags. It maintained that coffee supply tightening will not be seen until at least the 2015/2016 marketing year, barring any significant drop in Central American coffee production due to leaf rust disease. Tanzanian coffee belongs to the Colombian group. Tanzania, Africa’s fourth-largest coffee producer after Ethiopia, Uganda and Ivory Coast, produces mainly Arabica and some robusta coffee.

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Microlender targets low income earners

K-Finance Limited yesterday introduced to the market ‘housing improvement loan scheme’, an initiative targeting, low income earners owning unfinished houses. The company’s Chief Executive Officer, Ms Devotha Minz, told the ‘Daily News’ in an interview that K-Finance would be providing loans ranging between 200,000/- and 50m/- to entrepreneurs and individuals. “The initiative aims at empowering low income earners to have decent homes,” she said. She said K-Finance Limited, a micro-credit, business mentoring and insurance firm, is also dedicated in providing skilful education called ‘REVUKA’ to entrepreneurs on how to do business efficiently and profitably. Ms Minz said further that her microfinance firm has so far disbursed loans to more than 3,000 people since its establishment in 2008. She said SMEs have low default rate as 98 per cent of borrowers repay the loans. It is estimated that all the Microfinance Institutions (MFIs) in Tanzania put together serve a combined client population of about 400,000 SMEs, which is only around 5 per cent of the total estimated demand. Source Tanzania Daily News

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NAEB moves to ensure quality along the coffee supply chain

The National Agricultural Export Board (NAEB) will next month train coffee farmers, dealers and other stakeholders, a move expected to enhance quality along the supply chain. BOOST: NAEB will next month train coffee sector stakeholders in a move aimed at improving quality along the supply chain, and also to help them understand market trends. The New Times / File Betty Kayitesi, the in charge of international coffee marketing at NAEB, noted that coffee farmers and dealers are presently not making good profits due to poor handling skills, as well as lack of market information and speculation. “Most coffee farmers and dealers do not know proper produce handling methods. Also, dealers often buy and stock coffee even when there are price fluctuations on the market. It is, therefore, important they learn the best practices and understand market trends to predict market situations,” Kayitesi noted. She added that the training will also equip dealers with necessary skills to be able to negotiate good deals, especially on the global arena. “If they negotiate good prices and are able to calculate their income; this will have a trickle-down effect in terms of better rates for farmers and boost farmers’ morale, which will ensure sustainable crop output,” Kayitesi said. Colette Uwamahoro, the chairperson of Shining Coffee Exporting Cooperative in Bugesera District, noted that lack of the necessary market information and low rates have demoralised farmers, with some of them abandoning the crop. “Limited knowledge on market value of coffee at national and international levels means that dealers often give farmers low prices, which discourages them,” Uwamahoro said. Vedasiti Naganda, a coffee farmer from Nyanza District, is optimistic the training will help them gain requisite skills and knowledge to improve quality along the coffee supply chain. Though Rwanda’s coffee is preferred on the global market, the sector sometimes faces issues of poor quality and low prices that demoralises farmers. The coffee industry brought in about $5.3m (Rwf3.6b) during the month of November 2013, according to statistics from the National Agricultural Export Board. By Peterson Tumwebaze,The New Times

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Why food prices are going up

Food prices have gone up in different parts of the country compared to the past few months. Rwanda’s main staple food (Irish potatoes) now goes for between Rwf200 and Rwf250 a kilogramme in most markets of the City of Kigali; Huye, Nyamata and Muhanga districts, up from Rwf150 over the past three months. Irish potatoes are, however, up marginally at Rwf160 in Gakenke, Kinigi, Vunga, Byangabo and Cyanika markets. Emmanuel Irambona, a produce supplier in Nyabugogo market, attributed the increase to poor Irish potatoes yields last season, saying farmers used bad seeds. Other traders attributed the rise to bad weather that affected crop production. Fresh peas cost about Rwf1,300 a kilo in Kimironko, Remera and Nyarugenge markets, from Rwf800, while beans are at Rwf700 a kilo gramme from Rwf600. A kilo of cassava flour costs Rwf500 and sweet potatoes cost Rwf250. A kilo of carrots is at Rwf500 in Remera, Nyabugogo and Kabuye markets, same as that of tomatoes. Passion fruits cost Rwf800 a kilogramme, down from Rwf1,000 last week, while bananas go for Rwf1,000 a kilo from Rwf500 a few weeks ago. A kilo of mangoes costs Rwf1,300 and pineapples go for between Rwf500 and Rwf1,000, depending on size. Beef costs Rwf2,000 a kilo, up from Rwf1,800 a fortnight ago. A kilo of fresh fish is at Rwf3,000 from Rwf2,400 last week, while a tray of eggs costs Rwf2,500 in Remera, Gikondo and Kicukiro markets. By Seraphine Habimana ,The New Times

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Uganda: 46 million Stanbic shares on demand

Stanbic Bank returned to the fore of activity, selling 1,064,500 shares on Tuesday with turnover of sh32m after trading ended at an average price of sh30 per share. This was 85% of the day’s total traded value. There, however, remains overwhelming demand on the Stanbic counter, reaching 45.6 million shares on Tuesday. Demand is rising by the week as the bank is close to announcing its annual results alongside all listed companies as part of statutory requirements. Investors have, according to analysts, positioned to cash in on the post announcement dividend, a situation which has driven up the demand, although current shareholders are reluctant to give away their positions, creating the price mismatch. The New Vision traded at a high of sh605 and realised turnover of sh396,275, with 655 shares traded. The all share index, which is a barometer that compares the trading, closed at 1383.72 points. Four companies traded on Tuesday.  Overall, 1,080,164 shares exchanged hands with turnover at sh37.6m. Umeme sold 14,500 shares, picking sh5.2m in turnover. The utility company traded at an average of sh365 per share. Uganda Clays sold 509 shares at an average price of sh25, with turnover at a low sh12,725. Banking remains attractive as listed banks maintain a steady level of liquidity in a market where liquidity has, to a large extent, dried up while trading volumes are quite low. Commercial banks are, however, still grappling with restoring the uptake of commercial loans that dried up and continues to recover slowly following the double digit inflation that peaked over 30% about two years ago. The inflation pushed up borrowing rates. Source The New Vision

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Mbabazi woos Europe’s largest coffee roaster

Prime Minister Amama Mbabazi has urged Europe’s largest coffee roaster, D.E. Master Blenders, to develop strategic relationships with coffee farmers in Uganda. PM Amama Mbabazi Mbabazi told the delegation from the coffee roasting giant that the Government has embarked on a programme to multiply the number of coffee trees in the country to increase productivity. He said this will reduce household poverty, adding that the Government is encouraging agricultural zoning for specialised agricultural production. Mbabazi made the remarks while meeting offi cials from D.E. Master Blenders at his offi ce in Kampala on Tuesday. D.E. Master Blenders, which has its headquarters in the Netherlands, is also the third largest coffee roaster globally. The company is already operating in Luwero district, focusing on quality improvement, good agricultural practices and improved market access for participating farmer groups. “I can assure you of total support to facilitate your partnership with farmers because our economy is private sectorled and I do not see this changing soon,” Mbabazi said. He said proceeds from the nascent oil industry will be used to boost agricultural production and value addition to enable Uganda products meet international standards. Coffee is an important export product for Uganda, representing about 11% of the total value of exports. Luc Volatier, D.E. Master Blenders senior vice-president for operations, who led the delegation, said Uganda could exploit the global market through the company, whose coffee and tea products are sold in over 45 countries. The company sales amount to euros 2.7b (about sh11,000 trillion). Volatier emphasised the need for benchmarking high-intensity small-holder coffee farms like it is done in Vietnam and farmer sensitisation and training, as well as offering microfinance support to farmers to eliminate middlemen who erode farmer profitability. Agriculture minister Tress Bucyanayandi said 65 out of the 112 districts are potential coffee growers. He added that the Government plans to double national production from 3.5 million to six million 60-kg bags of coffee per annum. In the early 1990s, Uganda coffee was hit hard by the wilt disease, which killed about 40% of the country’s coffee trees. Due to inadequate research, extension and availability of resistant plant materials, the disease is still prevalent, greatly reducing the productivity of coffee farms. Source The New Vision

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