Busy week with increased activity on the selling and buying side. As the terminal market returned to mid March levels differentials starting to look attractive once more. Quality so far is good, we have now seen the full quality spectrum from a range of shippers and all are meeting expectations. There is a lot of coffee activity in Addis, ECX is selling big volumes, shippers are milling at full capacity and the only issue that can dampen shipments are logistics. Some shipping lines do not have containers in Addis, others do not have slots on vessels and this is the weak link. So far things are holding up, March exports were high (as mentioned last week) but shippers are increasingly frustrated when they want to book or stuff as shipping lines do have enough equipment to meet demand.

The graph below maps the differential between the Minimum Registration Price for Lekempti 5 and KC from May last year to date, 1 year of weekly prices. On 2 occasions have the differentials dipped below -30, in July/August last year when NY rallied strongly and recently when NY traded between 135 and 140 in the end of February first half March.

With NY heading back through the 135 level, differentials once again are looking attractive if the terminal market continues to rally shippers will once again have a chance to get short. Equally buyers will be encouraged to buy as quality is good and shippers are performing well. Additionally with Brazil well sold and differentials firm Ethiopia Naturals are looking increasingly attractive.

Birr 42.02 = USD 1

Have a good weekend.

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