Last week the terminal market helped shippers get sales registered, Grade 5 traded in volume as the market hovered the 190 c/lb level and minimum prices were kept just under 170. The washed coffee picture remains still very difficult, minimum registration prices for Grade 2 from the South (Sidamo, Guji and Yirgacheffe) are between 290-300 c/lb and there appears to be little roaster appetite to buy at prices greater than + 100. Since trade shorts are very small it would seem that that the standoff between sellers and buyers will continue for a little longer. This week the NY market took a bit of a breather retracing a fair chunk of last week’s rally and trading activity in Ethiopia also stopped as shippers will now busy themselves with fulfilling last week’s sales. Thursday was a holiday in Ethiopia which also helped slow business activity this week!

We are seeing some shippers offering last crop washed coffee stocks as current crop, as shippers try to offload sticky inventory as the new marketing season gets well and truly underway. Given this year’s lower washed coffee production we believe that these stocks will eventually get shipped however we caution buyers. We expect that new crop naturals will start to flow to Addis in much larger quantities in the coming weeks as shippers now have commitments to meet. As we see it shipments in February have not been remarkable, we expect exports figures to be available next week. We still believe that carry over stocks from the 21/22 crop to be substantial as all stakeholders got caught out by the dramatic drop in prices since October 2022 to January this year.

For now government policy regarding minimum registration prices, devaluation and the proportion of USD that shippers are permitted to retain for own imports has not changed and it has been the terminal market that has come to the rescue! However 50 cent upwards moves in matter of a handful of weeks is not a normal occurrence… how many more can we expect in the coming months?

Birr 53.75 = USD 1

Have a good weekend.

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