World Commodity prices climb

A World Bank report shows that prices of commodities such as coffee, cotton, tea and gold increased last month compared with the previous month.

The report shows that the price of arabica rose to $3.32 a kilo from $2.97 during the same period, but that of robusta remained at $1.66 a kilo as a month earlier.

The average tea price at Mombasa, Colombo and Kolkata auctions picked up to $2.68 a kilo from $2.36. In the Mombasa auction where many African countries sell their tea, the average price increased to $2.22 a kilo from $2.21.

Global tea prices have risen because production has fallen following an unfavourable weather condition in India while the demand for the commodity in Europe is strong.

Cotton A index price increased to $1.36 a kilo last month from $1.25 the preceding month while that of cotton Memphis price jumped to $1.5 a kilo from $1.35.

Tanzania earns foreign exchange from exporting mainly agricultural traditional commodities such as tea, cotton, coffee and sisal.

The gold price increased to $929 a troy ounce from $890 during the same period. The report says gold prices are expected to remain relatively firm in the near term due to investor concerns about the dollar, energy prices, inflation and geopolitical issues.

While risks are to the upside in the near future, the longer-term gold prices are expected to fall back as high prices discourage demand and stimulate new supplies, it says.