Heavy rains are disrupting the transport of coffee from growing areas to ECX warehouses and therefore limiting the supply of coffee to exporters and pushing up prices. Exporters are reluctant to cover shorts at ECX and requesting for delayed shipment to allow for more time to purchase coffee to fulfil commitments. Heavy rain at this time of the year are unseasonal and if it does not stop in the next few weeks could affect the imminent harvest by delaying the ripening of cherries. We are also very conscious of the quality problems last year’s wet weather caused during the post-harvest processing period. Drying coffee in wet conditions is rather difficult! The result is a high percentage of defective beans and increased instances of mouldy/phenolic/earthy cups. In terms of export volumes some of our partners are expecting that these are currently down by as much as 40% viz-a-viz a year ago, without export stats to corroborate it is hard to know, however we believe that exports are down compared to this time last year.
The Minimum Prices have remained stable for the past few weeks however with the terminal market hovering around 110-115 c/lb differentials are uncompetitive.
Forex, the Birr is at 36.68 to the USD.
Have a good weekend.