We all know that Ethiopia has a long and strong tradition of coffee drinking seeped in ceremony; currently the local market is flooded, as overseas buyers remain reluctant to pay up. Again we saw offer prices drop this week and with Thursday’s surge in NY some of the most aggressive ones got hit. However, trading has been far from continuous, many exporters want to sell but do not find buyers willing to meet their price expectations. Even with much improved bid differentials buyers and sellers need NY above 230 to be able to trade in larger quantities.
March inflation rate is reported at 34.7%; this is on the higher end of the recent 30 to 35% range observed in the past 6 months. Food inflation for March was 43.4%, bearing in mind the weight of food costs in the average Ethiopian living expenses it is apparent that living standards are dropping in Ethiopia. With the ongoing conflict in Ukraine food prices are expect to go even higher adding more pressure to an already struggling population.
The drought in South Eastern Ethiopia, including parts of Oromia, is devastating livestock and the incomes of pastoralist communities; according to World Food Program (WFP) 7.2 million people are at risk of becoming malnourished.
The BBC reported earlier this week that dozens of young men were gathered outside the Russian Embassy after rumours started circulating that Russia was recruiting Ethiopians to fight in Ukraine in exchange for large sums of cash! This story is bizarre but clearly indicates that unemployment in Ethiopia is high and the youth is desperate to find any means to earn a living, so much so that they are willing to travel to another continent to pick up arms and risk death in exchange for money…
Birr 51.27 = USD 1
Have a good weekend and Happy Easter to our friends in Ethiopia