EXECUTIVE SUMMARY 

• 2018/19 crop (on-year) 

The 2018/19 crop is revised to 426,987 MT (7.12 M bags), which is 10% higher than the 2017/18 crop. Washed and sundried production estimates are revised at 63,674 MT (15%) and 363,313 MT (85%), respectively. 

Disappearance has remained fairly constant with end of year 2018/19 stocks increasing by approximately 0.5 M bags. However, the composition of these stocks is heavily skewed towards Naturals from the Western region. 

Southern coffee stocks are at minimal levels; disappearance during the 2018/19 season has been very good due to falling differentials, in particular for Washed coffees, which reached levels below Colombia. 

• 2019/20 crop (off-year) 

The 2019/20 crop is estimated to be 411,119 MT (6.85 M bags), which is 4% lower than the 2018/19 crop. The volume of washed and sundried production is estimated at 57,866 MT (14%) and 353,254 MT (86%), respectively. 

Coffee harvesting has started in some areas of the South-Western region during the second half of August 2019. Coffee harvesting is expected to peak in November 2019 for most coffee producing regions, and more than 90% of the crop will have been harvested by December 2019. Harvesting of the 2019-20 crop will be completed on February 2020. 

Farmers along Guji, Sidamo and Yirgacheffe area started picking and selling red cherry during late September. Most coffee washing stations of Southern region have completed maintenance of pulping machines and construction of coffee drying beds before mid-September 2019. Coffee washing stations started processing washed coffee in late September. 

The report highlights the discrepancy between the ECX prices and FOB prices for the same qualities. The authorities have indicated that they wish to address this discrepancy by forcing shippers to sell at a price that is higher than the price paid at the ECX. A new regulation is to come into force that gives the Coffee Liquoring Unit (CLU) authority to stop shippers from exporting when they cannot prove that the sales price is above the ECX price paid for the coffee they are wanting to ship. 

In November 2019 there will be a referendum in Southern Ethiopia, to decide on splitting the Southern Region into 2 smaller Regions, granting limited autonomy to the people of these areas. This could be a reason for the downstream flow of 2018/19 stocks, meaning that the remaining coffee will be in the hands of exporters, as farmers and akrabis (local traders) prefer having cash to holding stocks in times of instability. 2 

In May 2020 there will be elections in Ethiopia. Whereas we hope that this exercise is peaceful, past elections have brought some disruption to the normal flow from farmer to exporter. If farmers and akrabis feel that there will be security problems, this would imply a faster than normal coffee flow from local players to exporters. On the other hand, if there is instability in coffee producing areas after the elections there could be disruption to the normal flow from up-country to export during the second half of the year. 

• 2020/21 crop (on-year) 

The 2020/21 crop is projected, under normal conditions, at 478,690 MT (7.98 M bags) and the weighted production probability is 449,121 MT (7.49 M bags).