All in all a quieter week on the coffee trading front. Shippers are focusing on executing their increasing commitments. Higher Minimum Registration Prices and a decreasing terminal market in NY taking the wind out of “selling” sails! New crop quality is generally good. In the South we are expecting a higher proportion of Naturals to be produced vs last crop due to larger crop that exceeded washing capacity. So expect more Sidamo 4 and even high grade Naturals, than last year.

We have discussed the struggle that shippers are having in acquiring Grade 4 and 5 coffees at ECX at the moment, because:

  1. Following a smaller crop in 19/20, carry-over stocks are low;
  2. New Crop is just now starting to flow from farmgate to warehouse
  3. ECX Maximum price policy has discouraged Agrabes to commercialise their produce through ECX
  4. New regulations that allow for Vertical Integration of lower quality coffees
  5. Increase in the number of companies interested in shipping coffee

As Vertical Integration takes hold less coffee will come to ECX and shippers will increasingly struggle to acquire coffee in the volumes they were accustomed to in the past. There are some big changes taking place in the ranking and positioning of stakeholders in the coffee value chain, adapting to this changing environment is key t o succeed!

On the political front, Ethiopia came in for a lot of criticism over reported atrocities carried out in Tigray by Eritrean soldiers that are moving around the region since the conflict there in late 2020. It will be critical for Ethiopia to have a “good” election in the middle of the year to reinstall  confidence in the eyes of international partners.

In other news, Egypt and Sudan are discussing a defence alliance clearly designed to square off any Ethiopian moves that could be construed as hostile to the 2 countries.

Birr 40.15 = USD 1

Have a good weekend.

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