It´s all a bit of a mess!

All

Another holiday in Ethiopia today, slowing things down when we need them to pick up!

Offers from shippers have all but dried up; As NY continues it’s drive upwards, Agrabes are getting emboldened and only release upcountry stocks at ever increasing prices. Offers at ECX are down to a trickle. Up country prices have exploded, in Sidamo the FOB equivalent for Grade 2 is 250 usc/lb and for Grade 4 160 usc/lb FOB. Shippers are therefore very focused on executing existing commitments struggling to first prise coffee from suppliers, and then empty containers and slots on vessels from shipping lines. There is plenty of coffee in Ethiopia, the struggle is to get it moving along the supply chain and on to vessels.

Politically the situation in Ethiopia is worsening, President Bidden has demanded the cessation of hostilities in Tigray and imposed sanctions in an attempt to stop atrocities being committed by Eritrean and Ethiopian forces in the region. The Ethiopian PM wants the US to stop meddling in what he perceives has Ethiopian internal affairs. Pls follow the link for the BBC’s take on the current political situation: https://www.bbc.com/news/world-africa-57266110

Covid cases and related deaths continue on a downward trend, to the relief of everyone.

The postponed General Election is due to be held on June 21st; let’s hope this time it actually happens!

Forex: Birr 43.00 to the USD

Have a good weekend.

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Elections postponed

All

Ethiopian Electoral Board announced a postponement of the ballot originally being held on June 5th. No new date has been given since the oficial issues behind this decision, slow voter registration, delays in training polling station staff and supply of ballot papers have not been overcome! The extreme insecurity in different parts of the country are a very strong reason not to hold the ballot at present and until resolved will continue to hamper efforts to forge forward with planning for the ballot. In Tigray region all plans to hold the poll had already been abandoned, however instances of violence in other parts of Ethiopia continue to occur and impede normal daily life.

Meanwhile in Addis, coffee mills are full and working at capacity churning out coffee for Export; the usual logistical constraints, lack of containers, changing vessel schedules and equipment breakdowns hamper efforts to get coffee on vessels. Having said this, we continue to expect Export figures to remain at very high levels as a combination of attractive prices and a bumper crop “push” coffee on to vessels!

Overseas buyers appear to have an insatiable appetite, Ethiopian coffee inquiries do not stop coming and business continues to be concluded; Ethiopia Washed Coffees are increasingly competitive vs coffees from other Origins, as Ethiopian Naturals have been vs Brazil. At this rate, carry out stocks are likely to be small this year across the full quality spectrum.

Minimum registration prices for Washed coffees were set lower this week, a clear sign that the Coffee and Tea Authority (C&TA) is in misteep with both the NY Terminal Market and overseas demand for these coffees.

Now some good news, Covid cases and associated deaths continue to decline. Nearly 1.5 Million doses of the vaccine have been administered.

Source: World Health Organisation

Birr 42.70 = USD 1

Have a nice weekend.

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Ongoing strong Export performance

All

We recorded in April 28.8 k MT of Exports in Ethiopia a new record for the month of April, following a record March. Things are looking good for this year! It will be interesting to see how Export shipments progress over the coming 4 months (peak shipment season); we believe that exports will remain at a very high level, prices are attractive, quality is good and the crop is big.

Internal flow is nearly restricted to Vertical Integration. The increase in terminal prices continues to strain the relationships between Agrabes and Shippers, with the former pushing to renegotiate previously agreed prices to better reflect a higher NY market. We expect some disruption but we not expect the overall export figures to be negatively impacted by stakeholders wrangling!

Covid cases continue to decline on a weekly basis and vaccinations are ongoing, so far nearly 1.5 Million doses have been administered.

Elections are still set to take place in June. The European Union is no longer sending a monitoring team to the country having not been able to agree a remit for their monitors with the Ethiopian Authorities. Registration to vote has been extended so as to allow more of the population to cast their votes in a few weeks’ time.

Birr 42.45 = USD 1

Have a good weekend.

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Trading continues in spite of the many challenges

Hi

Another up week in NY leading to increased activity in Ethiopia. One does get the sense though, that there has been a lot of selling in the past few weeks and that shippers are now concerned with covering rather than selling at higher prices! The supply of coffee to ECX is down to a trickle, in the last 5 trading days only 1,600 MT were traded; we would have expected at least 4 times that figure; In the last 3 years during the same period between 6,000 and 7,000 MT were sold at ECX! With the ECX quickly disappearing as a source of coffee for shippers, vertical integration supply chains are being challenged by short shippers desperate to access coffee and agrabes that see opportunities to increase their returns daily. The relationships between shippers and agrabes are being stretched, shippers financed agrabes want “their” coffee and agrabes demand higher prices more reflective of a higher terminal market. Eventually things will sort themselves out, for now stakeholders haggle. Export Logistics have not improved, containers and slots on vessels are hard to come by. In spite of these challenges we are still expecting very strong export figures for the month of April.

Covid cases (and thankfully related deaths) continue to decline and a heavy military presence throughout the country if keeping the peace.

Birr 42.13 = USD 1

Have a good weekend.

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