Following several drone attacks on vessels by Houthi rebels in Yemen, many shipping lines stopped calling Djibouti this week with disruptions expected to continue for the foreseeable future. The expectations are that an international task force led by the US Navy will restore safe passage in the Bab el-Mandeb strait, the 20 mile body of water which lies between Djibouti and Yemen. Our understanding is that the port of Djibouti remains open however there are delays in vessels arriving and leaving.

Shippers had already been very active selling balance stocks during 1st half of December, we believe that any unsold stocks are now contracted. Overseas buyers will have longs at very attractive differentials. Execution will depend on what the NY terminal market does in the coming weeks, if it stays above 200 c/lb it could result in unfulfilled contracts.

Birr 55.88 = USD 1

Have a happy festive season!

November 2023 shipments reached 16 K MT equaling the average November shipments for the past 5 years and were 4 K MT higher than in November 2022. All in all a good performance, December we also expect to be a good month for shipments. The higher terminal market and lower Minimum Registration Prices have flushed out the remaining lots in shippers warehouses at a time when the new crop is about to start arriving in Addis.

Accumulated exports for the 9 month period March to November remain below 200 KMT and around 21 K MT below the 5 year average for the same period. However, November shipments were strong and if this trend continues for the coming 3 months we expect that shipments for the 12 month period March to February to reach 240 k MT, which while historically low it is an improvement on where we saw things only 3 months ago.

Cherry prices in Sidamo have crept up as the harvest peaks, currently Washing Station operators are buying at 40 to 45 Birr per kg cherry, still well below last year’s prices.

Drought in the North of the country over the last few years is taking its toll on the population, the BBC reporting that 176 people have died from hunger in Tigray region:

Birr 55.85 = USD 1

Have a good weekend.

The Coffee & Tea Authority has reduced Minimum Registration Prices for 22/23 Crop Grade 5 coffees to try to boost shipments and clear warehouses of old crop as New Crop 23/24 is about to arrive in Addis for milling. New Crop 23/24 Minimum Registration Prices FOB Djibouti, are not so attractive, at around +100 for Grade 2 coffees from the South and 20 under for Grade 5s. The harvest continues to progress well with the Southern coffee producing regions approaching peak picking. Weather conditions remain favourable with a mix of rain and sunshine.

Most coffee growing areas are peaceful and safe. Cherry prices are increasing in the South reaching 40 Birr per kg cherry in some areas of Guji, however competition is subdued as a financing is limited and keeping a lid on out of control price hikes. Farmers are disappointed and we expect a higher than normal proportion of Naturals as a direct consequence of the perceived low prices for freshly picked cherries.

New crop Sidamo 4 FOB offers are competitive; shippers anticipate that the crop will be reasonably priced at farmgate level, demand subdued (Far East buyers are frustrated with the challenges of buying Ethiopian coffees over the past 2 crops).

Striking a more positive note, the city of Aksum was the centre of celebrations in recent days as reported by the BBC:

Birr 55.76 = USD 1