The crop has started to be picked and collected in nearly all producing areas of the country, only the higher growing areas like Yrgacheffe are yet to start. Our initial thoughts of decent quantity and quality remain unchanged, below we list the cherry prices that we have heard are being paid by washing station owners in Birr per kg cherry:

Guji 18-19

Sidamo 15-16

Limu 15

Kaffa 13

These prices are in line with prices paid to farmers last season, however as mentioned the crop is expected larger so it would not be unreasonable to have expected lower prices to reflect the larger crop, however the flow is small presently and only a few Washing Stations are working; as the flow increases and supply increases, if it outstrips Washing capacity we could see prices stabilise or even drop; on the other hand if demand from Washing Stations increases and competition to attract cherry intensifies then the price will go up. It is still a little early to get a realistic picture and we shall monitor the price and flow evolution.

There is very high percentage of Vertical Integration between Exporters and Washing Station owners this season. Offtake and pre-finance agreements are in place allowing exporters to access coffee at farmgate level and bypassing the ECX altogether. Expectation are that an even smaller proportion of this crop will find its way to ECX compared to last season.

Focusing on exports, below we compare Export figures for the current crop vs past 2 crops. We have started the “year” in May to try to outstrip the overlap between one crop and another, we could have started 2 month earlier at the start of the seasonal increase in shipments, however we believe that March and April shipments usually include a high proportion of previous crop Naturals…

What we can derive from the last 2 years is that we should see a drop in shipment over the period September to December/January followed by an increase from February 21 onwards as New Crop starts to be exported. Whatever the case (and confirmed by ECX figures) the 19/20 crop is a very disappointing crop and even if ECX volumes pick up the coming weeks, export quantities are likely to remain on the lower side.

Birr 37.00 per USD

Have a good weekend.

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