Exports continue to disappoint

All

We cannot say that it comes as a surprise but the December 2020 export volumes once again are below expectations; May to Dec 2020 exports are 25% below same period in 2019, unless the pace of Exports picks up significantly in the first 4 months of 2021, we shall see exports for the 12 month period May 20 to April 21 below 4 Million bags. Current sales pace Oct to Dec 20 versus our own Coffee Ithaka estimate are running behind by 6%. We have been commenting over the past few weeks and months on the slow pace of sales and this has been confirmed by actual exports since October. We are not sure what the effect the May elections will have on coffee flow from the interior to ECX and on to vessels but hopefully it will accelerate the pace of exports during the first quarter of 2021. We should also consider that the 2020 crop is higher than the previous crop and therefore more coffee is available for export from January onwards. In addition the crop came in early so coffee will flow earlier through the pipeline to Addis. Moreover, we believe that there still are many rolled over contracts that need to be shipped. Meanwhile, shippers are eager to sell, lower grade Naturals are easier to move because of more reasonable Minimum Registration Prices whereas Grade 2 Minimum Registration Prices remain still too high to attract any serious activity.

Forex: Birr 39.38 to the USD (the Birr actually appreciated to the USD, even if only marginally).

Have a nice weekend.