Government forces appear to control most of Tigray region and are poised to take the regional capital having surrounded it this week. All attempts at mediations by African leaders have been rejected by the Central Government that feel they have the upper hand and can resolve this rebellion my military force alone. Tigray leaders for their part, facing arrest and imprisonment, must feel they have little to lose by prolonging the standoff. We can only hope that the confrontation has a swift and peaceful resolution. Meanwhile there are over 40,000 refugees in Sudan fleeing the conflict.

The rest of the country is peaceful and life continues more or less as normal. At ECX, prices for current crop Naturals remain elevated even if the volumes are reasonable, as a consequence of intense competition between shippers that still need to cover shorts. New Crop Sidamo is trading at 220 c/lb FOB equivalent and New Crop Limu not much lower at 210 c/lb FOB Equivalent. Meanwhile, cherry prices paid at washing stations in the South (Sidamo, Guji and Yirgacheffe) vary between 19 and 25 Birr and 20 and 25 Birr in Limu.

Birr 38.01 vs the greenback

Have a good weekend.


Notwithstanding the conflict in the North of the country Ethiopian Coffee business continues at great pace; the NY market rally has made differentials more attractive and shippers have been able to register some sales in the past few days. At ECX the volumes on offer have increased as the New Crop harvest is in full swing and possibly as a consequence of these more turbulent times that we live in Ethiopia these days. Shippers are very eager to execute their commitments, getting coffee on vessels and be paid. You certainly get the feeling that the conflict is affecting all aspects of Ethiopian life and shippers decisions.

Meanwhile there is very little news from the conflict zones; again rockets from Tigray were fired at Amhara towns. In Addis the Government has arrested scores of influential and prominent Tigray military leaders and other persons, while at the same time freezing bank accounts and assets. An estimated 30,000 civilians have fled Tigray to Sudan to escape the conflict.

So far the pace of shipments is very disappointing, reflecting the poor 19/20 crop, May to Sep 2020 shipments are 33 K MT (25%)  lower than same 5 month period in 2019:

USD 1 = ETB 37.85

Have a peaceful and restful weekend.


  • 2019/20 crop (off-year)

The crop was forecast lower than the previous crop by 5% and ended up being even lower at 402 K MT (we had estimated 411 K MT). Split between Washed and Natural 20% and 80%, due to the sharp decline in production in the South where a higher % of the crop is washed viz-a-viz other producing areas of Ethiopia. We also revised down our carry out stocks by approximately 155 K bags to just over 1 Million bags, which is the lowest carry out stock figure in past few years. The pace of sales at ECX has been very low this 2020 Calendar year lagging behind 2019 by 30% in volume. Exported volumes started to lose pace from July and we expect this trend to continue until 20/21 crop coffee starts to come to market in earnest (from December onwards at ECX and March onwards FOB). Quality has also been disappointing due to excessive rain during the maturation period and wet weather post-harvest. Sundried qualities had many defected beans (blacks, mouldy and sours) and in the cup the coffee was found to be Earthy, Musty and Phenolic. Exports were consequently also lower than the previous 12 month period by 3%.

  • 2020/21 (on-year)

We are expecting a greatly improved crop in 20/21 both in terms of quality and quantity. Production is expected about 9% higher than in 19/20; the weather in the last 12 months has been much more beneficial for quality, harvesting started early and the weather post-harvest (so far) has been much more conducive to producing better quality coffee. Particularly Djimmah quality is expected to show big improvements viz-a-viz 19/20. The estimated split Washed to Natural is 19% to 81% reflecting the pick up in production in the more Natural growing areas of the West (Wellega, Illubabor and Djimmah). We also expect more volume of Natural from the South. Notwithstanding the usual political issues that plague this part of the world and the current global pandemic, we expect that the pace of sales from farmers to agrabe and on to the ECX to be constant and steady. The time that Agrabes are permitted to hold coffee unsold at ECX warehouses has been extended from 30 to 60 days which could cause some disruption however increased volumes will pressurize coffee to change hands along the value chain. The harvested started much earlier this year (compared to 2019) and we are already seeing New Crop Washed coffees trading at ECX, in December we expect much more coffee to be available. Cherry prices started from a much higher level this season compared to last. However, these seem to be stable at around 20 Birr/kg Red Cherry.

The introduction of a minimum price caused some disruption to the flow of coffee to Export markets. However, after a few weeks with far too high Minimum prices and consequently no sales registrations, the powers that be, lowered prices and more normal trade resumed. New Crop Minimum registration prices have again been set at overly optimistic levels however we expect that a happy balance will be struck at some point in the coming weeks.

The General Election that was postponed from 2020 to 2021 due to the pandemic is expected in June 2021. We pray for a rapid and satisfactory solution to the current conflict in the North of the country and a peaceful election in the summer of 2021.

  • 2021/22 (off-year)

The 2021/22 crop is projected, under normal conditions, at 435,277 MT (7.26 M bags) and the weighted production probability is 403,088 MT (6.72 M bags).


The ongoing fighting in Northern Ethiopia between Ethiopia National Army and forces loyal to the Tigray People’s Liberation Front (TPLF) has reportedly resulted in many civilian casualties. Amnesty International is reporting that there has been a massacre in a Western town  of Tigray region carried out by forces loyal to the TPFL following a defeat by Government troops in a nearby area. The conflict is turning increasingly brutal as Government forces appear to be gaining the upper hand in the conflict. The TPLF has decreed that all Tigray people must join the forces that are loyal to the political party to fight against the National Army which has been mobilised to Tigray to remove the TPLF from power in the Northern region.

Focusing on coffee, below we compare the ECX sales Year to November 6th over 3 years The figures speak for themselves, overall the sales at ECX are down by 30% in 2020 vs 2019:

Furthermore Exports are also very disappointing, below we compare export figures over the last 3 years:

May           25,967               28,449           26,142
June           25,790               29,294           27,082
July           19,015               26,512           17,928
August           19,995               30,279           23,694
September           14,443               23,696           17,557
October                19,966           17,674
November                18,328           13,263
December                14,188           12,992
January                16,570           11,166
February                17,456           16,199
March                26,949           20,739
April                25,135           21,809
         105,210             276,821         226,245
Ethiopia Green Coffee Exports (MT)

Birr 37.75 = USD 1

Have a good wkend

Tensions between local Tigray leaders and central Government that have been growing over the past few weeks came to a head this week. On Wednesday morning the Prime Minister of Ethiopia ordered the country’s military to mount an offensive to placate the Regional Government in Tigray region. This offensive comes on the wake of a State of Emergency having been declared in Tigray Region and after a military barracks was attacked by Tigray Rebel Forces. The Tigray People’s Liberation Front (TPLF) which on Tuesday was labelled by parliament a terrorist organisation unsurprisingly remains defiant having organised local Elections in September, which were labelled illegal by central Government. In a further show of disobedience last week the TPLF refused to accept the authority of the Prime Minister to appointment of a Federal Government representative to the region. The Government appears determined to nip this situation in the bud having cut communication links with the region and electricity supply. Many shops and offices are closed and residents of the regional capital are staying off the streets to avoid getting caught up in any trouble. This situation is very serious but not entirely unexpected as tensions have slowly been rising since the TPLF left the government 2 years ago after nearly 3 decades in power. Although the Prime Minister was awarded the Nobel Peace prize he seems unfazed in the use of military force to put down this mounting rebellion. All this is happening far from the coffee growing areas of Ethiopia, in the Northern part of the country on the border between Tigray and Amhara regions.

It is difficult to get information from the affected region since internet and phone services have been cut. Addis Ababa remains undisturbed by the fighting in the North of the country and our supply chains are in no immediate threat however we shall monitor for potential disruptions to the normal flow of the crop.

Birr is trading at 37.64 to the USD.

Have a good and peaceful weekend.