Arabica Coffee futures have collapsed from the the highs reached last month, the drop has been relentless and precipitous leaving us all trying to catch up! Trading in Ethiopia coffee has all but come to a standstill as stocks of parchment pile up at dry mills in Addis Ababa. The problem is that export sales of Washed coffees are well below expectations so coffee is not getting milled and shipped. Internal prices for cherries and parchment have been way above export prices and while the terminal market was rallying this mitigated (in part) the problem. However the terminal market is looking very shaky and with low export sales registered it is likely that Addis Ababa warehouses will remain full of unprocessed coffee for some time yet… if this situation is not resolved soon, processing of naturals and subsequent shipping could be affected, warehouse capacity is limited and if full of parchment the flow of naturals along the supply chain could be restricted, resulting in delayed shipments.
There is still no news of the the fighting in the North of the country, it has not stopped and the problem has not gone away, it seems to be a case of “out of sight, out of mind”!
Birr 50.80 = USD 1
Have a good weekend.