Very little business concluded this week, offers are plenty but prices are untradable. Minimum Registration Prices were put up this week, quite unexpectedly, so with the terminal market losing ground during the last few days, prices are unworkable.
Meanwhile, although there is some flow of coffee from the growing areas to Addis the volume is still much less than expected for this time of the year. Some stakeholders blame the wet and rainy weather for slowing down the transportation of coffee from the interior to Addis, however we feel that the volumes moving down the value chain are very much reduced compared to previous seasons. Farmers are not releasing coffee, prices are perceived as low and the value of cash not attractive enough for farmers to exchange coffee for Birr. Sales registrations remain low and forbear below potential exports in the coming few weeks.
Eventually the flow of coffee from the growing regions to Addis (and on to the port in Djibouti) will have to improve, however for now everything is very delayed.
It seems that this week the Prime Minister instructed the Coffee & Tea Authority to work on a plan that will lead to opening up the coffee business to foreign entities. We shall have to monitor this process carefully, the wheels of change turn slowly in Ethiopia but if they eventually change direction, we will all be travelling down a very different road!
Birr 53.87 = USD 1
Have good weekend.