- Dow Jones Commodities Services -
Starbucks Corp. has entered into partnership with Tanzania\'s Association of Kilimanjaro Specialty Coffee Growers, or Kilicafe, which should boost premium coffee output on account of increased earnings. Starbucks will offer premium prices to small-holder coffee farmers for high quality coffee, said Kilicafe\'s Adolph Kumburu, as well as providing credit and marketing services to coffee farmers.
Starbucks Corp. (SBUX) has entered into partnership with Tanzania's Association of Kilimanjaro Specialty Coffee Growers, or Kilicafe, which should boost premium coffee output on account of increased earnings, the coffee grower group's executive director told Dow Jones Newswires Friday.
Starbucks will offer premium prices to small-holder coffee farmers for high quality coffee, said Kilicafe's Adolph Kumburu, as well as providing credit and marketing services to coffee farmers.
Small-holder farmers are key to Tanzania's premium coffee production, Kumburu said.
Under the partnership, Kilicafe is expected to increase production of premium coffee brands and Starbucks will pay $170 per 50-kilogram bag of grade AA, Kumburu said.
The current price of a 50-kilogram bag of grade AA at the Moshi auction ranges between $74.2 - $125, according to latest figures from the Tanzanian Coffee Board.
Starbucks will also pay an extra $5 for every 50-kilogram of premium coffee to help small-scale growers. The company hopes to double coffee imports from Africa.
Kilicafe, started in 2001, is Tanzania's largest coffee farmers' association with 80 member-farmer groups representing more than 7,000 small-holder farmers from the Kilimanjaro, Mbinga and Mbeya coffee-growing regions.
According to industry insiders, Kilicafe's members produce around 1,000 metric tons of specialty coffees a year.
Tanzania's annual coffee output is estimated at 50,000 tons but the country is carrying out a replanting program to boost output to 120,000 tons by 2010.