May exports, a new record!

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For the 3rd month in a row shipments hit a new record, last May exports reached over 32 k MT a record for the month of May and indeed the highest monthly exports figure ever! Some Ethiopian insiders believe that these high Export figures are due to the upcoming ballot (June 21^st), no doubt that the ballot has focused minds to get coffee on vessels, however I believe that other factors, much more coffee related than political, explain these high numbers. Firstly, the 2020/21 crop is larger than the previous crop, therefore there is more coffee available. Secondly, prices have been very attractive for both overseas buyers and shippers, so export business has been brisk and in volume. While Brazil differentials remained fairly firm over the past couple months as NY rallied, Ethiopia Natural differentials weakened significantly attracting overseas buyers’ interest, like bees to honey! June shipments are likely to remain high, even with the disruption to flows around the Elections. Indeed we expect that shippers will remain under pressure and very busy for many weeks to come.

Logistics have been a struggle, in fact, if there were more containers available and if space on vessels was not constrained, we would have an even higher Export figure. Although shipping lines are the main guilty party in causing this bottleneck, at times of known potential instability, such as tribal tension and Elections, importers slow down their activity and run stocks down, resulting in less imports and a lower number of containers being imported, and therefore less containers available for exports.

The UN has declared that the northern region of Tigray has famine. The BBC explores this in the following article: https://www.bbc.com/news/world-africa-57422168

Birr 43.30 = USD 1

Have a good weekend.