July shipments confirm the trend

July exports were just above 21 k MT, the lowest export figure for the month of July in 6 years. At this rate the 22/23 crop year exports will be around 220 k MT the lowest export figure since 20/21. The good news is the following year 21/22 (March 21 to Feb 22) shipments were a record 310 k MT, so there is hope! If crop 22/23 is a write off looking ahead at the coming crop (23/24) , we are encouraged by the effects of heavy rainfall (which as been so detrimental to the current crop) and the prospect of an early crop will translate into good volumes; furthermore, if the rain stops during the harvest and post harvest period, quality will be good.

There is a noticeable change in destinations of exports, with Saudi and other Middle East destinations becoming more predominant at the expense of markets in the Far East, Europe and the USA. This, in our view, is a reflection of the qualities available this season having been negatively impacted by excessive moisture and humidity.

The Central bank has finally given in to exporter pressure and reversed the forex restrictions imposed during the conflict in Tigray; from now onwards shippers will be able to keep 40% of USD earned from coffee exporters to be used for payment of imported goods and services. This will allow shippers to lower USD export prices and the Government hopes increase export volumes. Previously exporters were only retaining 20% of USD export values. Additionally, the Black Market rate for USD should also drop.

Birr 54.89 = USD 1

Have a good weekend.