African Union sponsored peace talks are to start in South Africa both sides in the Ethiopian conflict have confirmed. This after 2 years of conflict and a recent escalation of the fighting in the North of the country. This is a breakthrough that has been long in the waiting, much hope and expectation on a permanent cessation of hostilities is being placed in the AU brokered talks.
The harvest is ongoing in the lower producing areas. Weather has been conducive for good quality so we have expectations that the current 22/23 crop will be an improvement on 21/22. Cherry prices are very high 51 Birr/kg cherry, the equivalent to USD1 per kg of cherry or 270 usc/lb of green coffee equivalent at farm gate level. This is before we add all costs from farm gate to FOB. These costs are skyrocketing, the fuel price has more than doubled in the last 2 months! If stakeholders are banking on a local currency devaluation they may have to rethink, this week the black market rate has been trading in the mid-80’s having broken 100 last week. The issue is that the cost of living crisis has stifled demand of imported goods and as a consequence the country is importing less. We clearly see this in empty container availability which has decreased considerably even with lower exports. Economic activity in Ethiopia appears to be slowing down, requiring less USD to pay for imports and fewer containers coming to Addis with imported goods.
In the coming 2 weeks we expect the crop in Limu to start being harvested and higher elevations in the South also.
Birr 52.66 = USD 1
Have a good weekend.