New Crop offers is well and truly here, shippers are now aggressive sellers in all qualities. What is noticeable is the very firm price for all Washed Coffee qualities, which is a direct consequence of the reduced availability viz a viz last year’s production. Washed Sidamo 2 is offered at 310 to 350 usc/lb FOB and Yirgacheffe 2 is a few cents higher. Even Limu 2 is under pressure offered at 270 c/lb FOB. There is clear resistance from roasters to pay the asking prices so something will have to give. 2021/22’s lower production could eventually lead to higher traded differentials which seems hard to justify when we consider the terminal market has doubled in value during 2021. Natural prices are within expectation, with Djimmah 5 trading at 30 under FOB with Lekempti 5 a few cents higher and Sidamo 4 currently at around -15 FOB.

December shipments came in at a tad shy of 16 k MT, which is lower than previous months but still a record December, keeping us on track for a 5 Million bag Export year (March 21 to Feb 22).

Exporters got a kick in the face this week, the Central Bank has decreased the percentage of USD that Exporters can keep from export revenue from 40% to 20%, basically reducing by half the proportion of export revenue that can used for imports. The reasoning behind this move could be justified by the doubling in the unit price that coffee has had in the past 12 months, however it is a blow for shippers that rely on coffee export revenue to acquire foreign goods and services.

Birr 49.45 = USD 1

Have a good weekend.

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