From the Field, News
Sunday, November 21, 2021
An Update on Ethiopia
In Ethiopia, rising tensions are affecting the lives of millions, including those growing coffee. While we don’t have the full picture yet, we spoke with Adrien Mahy, Head of African Arabica, to gain a better understanding of the impact of the conflict on coffee production in Ethiopia.
The new crop will be impacted and will likely not arrive on time. We might see some road blocks from certain regions and logistic issues when moving coffee internally.
“As we are starting the season, there is less cash available to purchase cherry. As a result, we should expect a bigger percentage of naturals this year,” Adrien says. We project that there will be a shorter season for washed coffee, with shipments starting in March.
Today, traders can buy new crop, but they have to adjust their current contract to match the minimum price to get coffee moving. If the market rallies more, we can expect to see more defaults as exporters, who were already hit with higher costs, face a tougher economic environment.
At the moment, the conflict is mainly occurring about 400 kilometers from Addis Ababa. The situation is changing frequently and we’ll be watching it closely. We recommend that clients book washed coffees now and also expect delays in delivery. Reach out to your trader with any questions about how this may affect your buying strategy.