Shippers continue to offer, however a combination of lower terminal market, higher minimum registration prices and buyers having “filled their boots” when NY rallied a couple of weeks’ ago have resulted in less business being concluded. Quality concerns are an ongoing issue, both in Naturals and Washed coffee qualities. Weather continues wet, normal for this time of the year.

As we approach the end of the month we look forward to analysing the shipment figure for April, although this show a marked increase on previous months we suspect that full potential will not have been reached. Quality issues and resistance to lower prices (or prices lower than farmer expectations) have resulted in retention at farmgate level. Coffee is flowing much better than a few weeks ago however, it is not a flood!

In other news, violence returned to Amhara region this week with the killing of a local leader:

There seems to have been some movement on the Ethiopian side of the argument regarding the dispute with Egypt over damming the Nile:

Forex 54.14 = USD 1

Have a good weekend

Whereas the focus of the world this week was on the disastrous fighting in Sudan between opposing factions within that country’s military structure, Ethiopia has not been featured in the news, a sign that the country is at peace and inspite of the drought in certain parts of the country, things are stable.

On the coffee front, the buoyant terminal market allowed for some trading even if in a more subdued manner viz a viz last week when the terminal galloped ahead. Shippers are now preparing coffee for shipment, moving stocks to Addis from upcountry and the focus has shifted to execution of commitments rather than selling additional volumes. It will be interesting to see what happens to Grade 5 and 4 FOB differentials for September shipment onwards as New Crop (23/24) Brazil Natural prices are offered at substantial discounts to 22/23 crop offers (for shipments in the next 3 months). Certainly roasters are looking for big discounts in prices, however it is not certain that more usual/normal Ethiopia Natural differentials will be reached this crop. There has been a lot of retention by farmers and agrabes, if they do not like the price they will keep the coffee. This season will see a build up in stocks, after stocks were drawn down in 2021 and to a certain extent in 2022. Shipments will accelerate in the coming months, the recent terminal market moves above 190 c/lb allowed for sales and these will become shipments over the coming 2 to 3 months. The picture for second half of 2023 is murky, the underlying theme seems to be that farmers are selling slowly and consequently stocks are upcountry rather than in Addis.

Inflation rate has remained fairly constant over the past few months between 32 and 35%, with food price increases above these rates. Food inflation remains a major reason behind farmers demanding increasing prices for their coffee, farmers do not sell unless their price expectations are met.

Forex 54. 09 = USD 1

Have a good weekend

The rally in NY really gave business a push this week, the terminal market moved approximately 20 usc/lb and finally shippers’ price expectations could be achieved. A lot of business was concluded this week let’s see some execution now! Quality of Naturals (Grade 4 and 5) seen so far this crop cycle has been very disappointing, with many samples rejected for earthy, mouldy and phenolic cups. It seems that wet weather in parts of Djimmah and insecurity in Wellega region have played a hand in reducing cup quality. Washed coffee quality is good but there is very little Washed Sidamo and Yirgacheffe this year therefore buyers need to be diligent to avoid receiving coffee from different regions “to what it says on the bottle”!

Meanwhile shipments continue to disappoint, March marks the first shipment month of New Crop shipments and this March was the lowest for shipments in the last 5 years. This follows very low shipments in December, January and February. We expect that in April there will not be a sharp reversal, hopefully the recent rally in NY and business concluded this week will eventually filter into better shipment figures.

Birr 54.03 = USD 1

Have a good weekend