TechnoServe-Supported Trade Association Purchases its First Options on Coffee Futures Market

ARUSHA, TANZANIA, OCTOBER 6, 2006 —Today, Tanzania's KILICAFE coffee trade association purchased its first options contracts on the New York Board of Trade coffee futures market. KILICAFE is advised by TechnoServe/Tanzania, which is supported by United States Agency for International Development (USAID) and the Swiss Cooperation. This transaction will protect KILICAFE's small-scale farmer members against a drop in international coffee prices and give them access to more working capital. In the event of a major price fall during the next two months, KILICAFE will sell the contracts to recover the farmers' production costs. KILICAFE will continue to purchase options contracts throughout the current coffee season, which ends in March 2007.

The trading of options contracts is part of KILICAFE's broader strategy to help farmer members increase incomes. Since 2001, the association has been helping growers use modern processing technology, improve quality, and build market links with specialty coffee buyers. These efforts have resulted in 70% price premiums for farmers selling specialty coffee, which is expected to exceed 500 metric tons during the current season.

KILICAFE was established in 2001 as part of the USAID SHAMBA project that was implemented by TechnoServe/Tanzania. The farmer-owned association has 10,000 members in Mbeya, Ruvuma, Kilimanjaro and Arusha regions. The World Bank Commodity Risk Management Group helped KILICAFE and TechnoServe to develop a price risk strategy and identify a broker, Hencorp, one of the largest suppliers of coffee risk management tools in the world. KILICAFE is Hencorp's first client in Africa.

About TechnoServe: TechnoServe helps entrepreneurial men and women in the developing world to build businesses that provide jobs, income and economic opportunity. Since its founding in 1968, the U.S.-based nonprofit has helped to create or improve more than 2,000 businesses, benefiting millions of people in 32 countries. TechnoServe is currently working to build and expand businesses in Mozambique, South Africa, Tanzania, Kenya, Swaziland, Uganda, Ghana, Madagascar, Rwanda, El Salvador, Honduras, Nicaragua, Guatemala, Peru, Colombia, Brazil, Côte d'Ivoire and India. TechnoServe was recognized as one of the world's "Outstanding Social Entrepreneurs" by the Schwab Foundation for Social Entrepreneurship.

For more information, please contact:
Paul Stewart, Coffee Marketing and Finance Coordinator, TechnoServe/Tanzania Tel: +255-27-250-9657; Email: paul.stewart@tnstanzania.org

Luba Vangelova, Director of Communications, TechnoServe/DC Tel: +1 (202) 719-1302; Email: LVangelova@tns.org