A number of meetings of coffee professionals are taking place across Europe currently, last week many were in London for the British Coffee Association (BCA) gathering and this week we have the World of Coffee event in Milan. Most participants are so pleased to reconnect with old coffee friends that the discussions about our trade’s ailments get forgotten, this is truly a people business with connections that stretch around the globe. True to form, many Ethiopian Exporters are in Europe keen to find homes for higher than usual stocks (for this time of the year) sitting in their warehouses back in Addis. Whereas the terminal market has not returned to the hefty levels seen in February (260 ish) the recent foray in the 240’s helped flush out some of these stocks. No doubt that lower than expected mild arabica crops in Central and South America have also helped in keeping bid prices at historically attractive differentials. However, there still seem to be stocks of good quality coffee unsold, these will be looking for buyers in the coming weeks. In Addis many shippers are busy fulfilling recently done Grade 4 and 5 sales. Shipments continue to be hampered by logistical constraints, lack of food grade containers and slots of vessels, however, all in all, coffee is flowing reasonably well along the supply chain.

The week started with grim reports of attacks, burning of dwellings and mass graves; pls follow the link for the BBC’s report: https://www.bbc.com/news/world-africa-61864392

Birr 51.90 = USD 1

Have a good weekend

Minimum registration prices increased this week while the NY market fell, shippers’ offers for Grade 5 hover around 200 c/lb with NY around 230 difficult to conclude business. Washed coffee asking prices are still firm making grade 2 from the South above +100 FOB. Buyers’ price ideas are well below these levels so trading has been difficult.

Inflation is once again creeping up, between February and May the inflation rate increased just over 4% from 33.6 to 37.7%. Food inflation, a very important factor in analysing Ethiopia´s standard of living, is very high at 43% per annum.

The BBC is reporting that up to 30 Million people in Ethiopia and more in neighbouring Sudan and Kenya are at risk of hunger: https://www.bbc.com/news/world/africa?ns_mchannel=social&ns_source=twitter&ns_campaign=bbc_live&ns_linkname=62aae66332686a6e65aefa4b%26Ethiopian%20children%20suffer%20%27deadliest%20form%27%20of%20malnutrition%262022-06-16T08%3A40%3A39.617Z&ns_fee=0&pinned_post_locator=urn:asset:cf75e5cb-bd67-4470-a443-b3268341738c&pinned_post_asset_id=62aae66332686a6e65aefa4b&pinned_post_type=share

Birr 51.80 = USD 1

Have a good weekend.

The Coffee and Tea Authority (C&TA) this week decreased hugely the Minimum Registration prices by around 20 c/lb while NY increased 8 cents week on week. We are not sure why this happened since last week registrations surely increased as shippers took advantage of a higher NY (the highest since the collapse that followed the invasion of Ukraine). Shippers continue to offer coffee at same levels as a week ago (around 200 c/lb for Grade 5) but with NY lower buyers have shied away a little this week. Upcountry agrabes are offering Grade 5 at equivalent of 210 c/lb FOB. Washed coffee offers continue firm, Grade 2 from the South (Sidamo and Yirgacheffe) at >+100 FOB. Limu 2 at +50 FOB. Buyers are hard to comeby at these steep differentials but some business is taking place.

It has started raining, as expected, in recent days, helping to ripen the crop on the tree. The rains should continue until the start of the harvest in October. A less desirable consequence of the rainy weather are impassable roads, frustrating agrabes and shippers as they try to move coffee from the growing areas to Addis Ababa for processing and onwards for export.

May exports recovered some of the lost ground following a disappointing April; The 2022 M/A/M quarter is the second highest M/A/M in the past 5 years, 2021 was a truly exceptional year. 2022 M/A/M Exports are at 78 K MT (May 2022 exports 30 K MT have only been bettered in the last 5 years by May 2021), we seem to be well on our way to reach 270 K MT possibly even 300 K MT exports March 22 to February 23, we shall see what the next 9 months have instore for us!

We have been reporting over the past weeks that the Birr has remained very stable even with inflation running at a steady >35%. However, the Black Market rate is starting to move higher, currently the BM rate is putting a value on the Birr 35% below the official rate. For now this appears to be OK, but if the difference in the BM rate vs the official rate continues to increase things could get messy.

Birr 51.69 = USD 1

In other news, Beverages Multinational Coca-Cola Beverages Africa is to invest USD 100 M in a bottling plant in Ethiopia, increasing production and adding 500 people to the workforce. Perhaps the most significant aspect of this investment is that it shows that foreign investors are feeling confident that the current stalemate in hostilities between the army and rebels groups opposed to the Central Government will prevail.

Have a good weekend

The recent visit to 240 c/lb in NY allowed for fresh business in Ethiopia coffee. Logistics have also improved a tad, with better availability of containers and slots on vessels. Exports are running a little smoother, we have been pleasantly surprised by how much seems to be getting processed, loaded and moved to Djibouti. At the port vessel availability is also better than a few weeks ago, long may this trend continue…

In Addis there are still some stocks of unsold Washed coffees, however even these qualities seem to be finding buyers and slowly (slower than normally) Grade 2 coffees are moving to Djibouti for onward shipment. Much bigger volumes in grade 5 were registered for export this week at around the 200 c/lb FOB level. Asian buyers are very active in Grade 4 qualities both Sidamo 4 to a lesser extent compared to Lekempti 4 sales. Lekempti 4 is increasingly more acceptable to usual Sidamo 4 buyers.

Meanwhile the BBC reported on journalist arrests in Addis : https://www.bbc.com/news/world/africa?ns_mchannel=social&ns_source=twitter&ns_campaign=bbc_live&ns_linkname=62978207fc2fb576dc00cae1%26Ethiopia%20police%20ramp%20up%20pressure%20on%20embattled%20media%262022-06-01T15%3A21%3A48.702Z&ns_fee=0&pinned_post_locator=urn:asset:98a9ce72-f216-4b67-ba9c-18446e080507&pinned_post_asset_id=62978207fc2fb576dc00cae1&pinned_post_type=share

Birr 51.63 = USD 1

Have a good weekend.