We forecast positive consumption growth across all agricultural sectors in the five years to 2014; growth will be supported by rising living standards and by an expanding population. Strong production growth is anticipated for sugar, coffee, rice and maize; growth will result partly from the increased investment the industry is receiving from both public and private-sector agents; it will also reflect the opening-up of new markets for major export crops. Although the grains sector continues to be vulnerable to variable rainfall and drought, problems are increasingly confined to specific regions; meanwhile, other regions tend to produce a food surplus. Fluctuating commodity prices remains the main downside risk for the coffee and sugar sectors. Meanwhile, a commitment to increasing food security is expected to be a major growth driver for the production of both maize and rice.

Key Forecasts
Maize is Tanzanias most widely produced and consumed grain. Production will expand by 27% in the five years to 2013/14; however, consumption will grow almost at the same rate of 26.8%, necessitating a continued reliance on imported corn in order to meet the shortfall.

Rice production is expected to grow by 20.4% to 2013/14, with growth being partly driven by foreign companies which cultivate rice for shipment to their home markets. Rice consumption continues to be higher in the diets of high-income consumers in urban areas; consumption is predicted to grow by 7.5% to 2014.

As a major cash crop and key export, coffee production will increase by 37% to 2013/14, largely in response to export-driven demand and efforts to boost production; although domestic consumption will grow by 39% to 2014, growth is from a much smaller base. Growth will benefit from rising incomes and marketing efforts aimed at increasing domestic consumption.

In the five years to 2013/14, we expect sugar production to grow at an accelerated pace, predicting growth of almost 46%. Growth will be driven by efforts to expand the amount of land under cultivation, as well as the countrys sugar-processing capacity. Meanwhile, sugar consumption will grow by 32% to 2014, underpinned by population growth and improved living standards.

2010 Real GDP Growth: 6.4% (up from 6.0% in 2009; predicted to average 6.3% from now until 2014).

Consumer Price Inflation: averaged at 12.1% year-on-year in 2009 (predicted to fall to an average of 8.2% in 2010).

Key Views
Tanzania has potential to expand its current position as a regional exporter of grains. In April 2010, the government lifted the formal ban on the export of cereal crops that it had introduced in 2008 over concerns about food security. Tanzania currently has only a modest trade in maize, with Kenya, Malawi and Zambia being the primary recipients of Tanzanian exports.

Tanzanias coffee industry will continue introducing measures aimed at protecting producers from fluctuating coffee prices. The launch of indicative prices in July 2010 should make it harder for private buyers and middlemen to cheat the farmers; this will enable producers to demand better prices. It should also encourage farmers to raise quantity and quality of coffee for export. Other areas of focus will include infrastructure improvement, access to credit and an expansion of the area currently under cultivation.

The prospect of developing sugar as a major export crop will underpin efforts to increase production. Specifically, we predict that producers will increase the amount of sugar produced for export to the EU. In the longer term, efforts to develop biofuels from sugarcane could also provide the industry with a key growth stimulus.