Tanzania's coffee exports are to rebound by nearly 40% from last year, when drought wrought severe damage to yields, but will remain constrained by "minimal" government support.

The African nation, which typically produces more beans than in neighbouring Kenya, will ship 810,000 bags in 2010-11, a report from regional US Department of Agriculture staff said.

This estimate represents a sharp increase on the previous year, when exports fell "precipitously" to 580,000 bags, the second lowest figure on record, thanks to "poor, drought-related coffee flowering� and an extensive mealy-big infestation", the briefing said.

However, it leaves exports well short of the 1.15m bags shipped in 2008-09, after rising prices incentivised growers to maximise production.

And output may struggle to grow rapidly, given the focus of a government agricultural development plan "kilimo kwanza", or "farming first", on grains.

'Limited budget'

"The government has decided� that the traditional Tanzanian export, such as crops, coffee tea, cashew nuts, have not helped Tanzanians achieve food security," the report said.

Kilimo kwanza has provided "minimal" direct support to the coffee industry, offering about $345,000 a year for the breeding of tree seedlings, and sale at subsidised rates.

However, coffee growers will receive some indirect benefits from improvements to land legislation, roads and irrigation infrastructure aimed at helping the grain industry.

Kenya vs Tanzania 

Tanzania's reluctance to boost its coffee industry contrasts with the stance in Kenya, where the government has given the Coffee Development Fund $12m to help farmers with pesticide and fertilizer payments, with the aim of near-doubling output by 2015.

Kenya's tea industry alone covers from exports the country's entire food import bill, the United Nations said earlier this week.

Tanzania has proved one of the worst affected countries by the spike in international food markets, with prices of corn, the most important grain, rising by 23% in the first nine months of last year, on top of a 14% increase in 2008, according to World Bank data.

Futures eligibility

Tanzanian arabica coffee beans are, unlike that in top-ranked producer Brazil, eligible for delivery against New York futures contracts.

A shortage of deliverable stocks has been blamed for the spike in New York prices to 175.00 cents a pound last week, the highest for a near-term contract for 12 years.

The July lot stood at 160.00 cents a pound at 11:30 GMT, down 0.9% on the day, with the better-traded September contract losing 0.5% to 162.40 cents a pound.

In London, robusta beans for July were 1.2% higher at $1,667 a tonne, with the September lot adding 0.2% to $1,701 a tonne.