Origin Report - Ethiopia

Our January origin report visits Ethiopia as the last of the harvest is completed in the southern growing areas of the country. The coffee year has brought a unique situation to Ethiopia, as the price for coffee cherries has skyrocketed since the last harvest in opposition to the C Market which has retreated significantly over the same period, leading to new challenges for many actors throughout the country’s coffee industry. Globally, prices have held steady since mid-November, and certified inventories of Arabica coffee continue to recover from the low numbers we’ve seen recently. Read on for a more comprehensive look at the movement in the C Market, facts and figures from the International Coffee Organization, and updates on the harvest from our Ethiopian sourcing office.

The World Market

C-Market Analysis

C Market candlestick chartSource: Tradingview

Since our December Origin Report, the C Market has primarily maintained its trading range between approximately $1.55 and $1.75 per pound, only falling below that level over the last two days at the time of writing (January 11). Price volatility remains relatively high, though the month has seen many fewer days of +/-$0.10 price changes as compared to the previous month. While prices have remained relatively consistent in the short-term, looking back we see that today’s price of $1.46 per pound is approximately 38% below where the market was trading at this time last year.

Global Coffee Industry Statistics

ICO composite daily price indicatorSourced from the International Coffee Organization unless otherwise noted. Read their full December 2022 Coffee Market Report here.

  • The ICO Composite Indicator Price (I-CIP) gained 0.3% from November to December 2022, averaging 157.19 US cents/lb for the latter, while posting a median value of 157.73 US cents/lb.
  • The Colombian Milds-Other Milds differential sprung back up 48.2% to 13.88 US cents/lb.
  • Intra-day volatility of the I-CIP decreased 0.2 percentage points between November and December 2022, reaching 9.1%.

ICO certified stocks chart

  • The New York certified stocks increased by 46.6% from the previous month, closing in at 0.87 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.08 million 60-kg bags, representing a decrease of 25.5%.
  • Global green bean exports in November 2022 totalled 9.21 million bags, as compared with 8.31 million bags in the same month of the previous year, up 10.8%.

At Origin

Harvest in Numbers and Statistics

Coffee year 2021/22 was an historic year for Ethiopian coffee exports, bringing in 1.014 billion US dollars on the export of 4.7 million bags of 60 kg. This marked increase over earnings in previous years can likely be attributed to both the relatively high C Market level seen throughout much of the coffee year, as well as an increase in the share of specialty coffee exported versus commercial coffee, with specialty coffee making up 60% of the country's exports as compared to 35% in the previous year according to Adugna Debela, Ethiopia Coffee and Tea Authority Director General.

Washed coffee being dried on raised beds at Boledu's Konga washing stationWashed coffee being dried on raised beds at Boledu's Konga washing station

Harvest for coffee year 2022/23 began in mid-October in lower elevation areas, though much of the harvest was delayed due to extended rainfall in some parts of the country’s growing areas. Currently, more than 80% of all coffee has been harvested throughout the country, with western growing areas like Limmu finished while areas 2000+ meters above sea level in the southern growing areas are still in the midst of the harvest. USDA production estimates for the year project 8.25 million bags of coffee produced in 2022/23, with 4.72 million bags projected for export compared to 4.70 in the previous year.

Despite the ~30% price decrease in the C Market since this time last year, red cherry prices have increased by around 60% this harvest season. This is already having knock-on effects for the year’s production, as noted by Ethiopia Green Coffee Buyer Rahel Mulat during a recent trip throughout the country’s growing areas. “In my visit I have seen most washing stations operating below their potential/capacity,” she says. Through the combination of high cherry prices, a low C Market price, and poor access to financing, many washing stations have a limited buying capacity this season. The results will likely be a greater proportion of Natural coffees compared to Washed as some smallholder producers take on post-harvest processing themselves, drying coffee on their own properties without access to the needed infrastructure for Washed processing.

Rahel Mulat (right) cupping offers at Arfasa General TradingRahel Mulat (right) cupping offers with Tofik Jihad, Quality Manager at Arfasa General Trading

Trip Report - Visiting our partners in Ethiopia

In December, Nordic Account Manager Filip Odeholm traveled to Ethiopia to visit some of our partners along with Rahel Mulat, Ethiopia Green Coffee Buyer. During the visit they spent time with people from Arfasa, Boledu, Heleph, METAD, and SNAP, cupping a wide range of coffees and learning more about each operation throughout the week. Filip shared a little about his trip with us, reflecting on the experience.

One of the most exciting things about my trip to Ethiopia in December was to meet with many of Ally’s skilled suppliers and partners there.

A lot of new companies were formed after the export regulations changed back in 2017, and these young, ambitious producers have been able to tailor their business models specifically to a quality driven market from scratch. Refined processing protocols from the washing stations, innovative traceability systems as well as dry-milling equipment and warehouses keeping that same high standard are just a few examples of what we were introduced to. I found their dedication towards leading the way forward for Ethiopian quality coffee very inspiring!

Picture collage of Filip's trip to Addis AbabaImages from the trip, clockwise from top left: Filip Odeholm and Rahel Mulat, filling coffee bags at METAD's facility, warehoused coffee at Arfasa General Trading, Rahel cupping at Boledu's office.

Ally Coffee Ethiopia

As the harvest winds down, the year looks promising for high quality lots from Ethiopian producers. Early Washed sample cuppings have shown fantastic results from all regions, with coffees from Yirgacheffe displaying their distinctive jasmine and citrus notes according to Rahel Mulat. While this is positive news for Washed coffee lovers, Rahel also reiterates that the supply of Washed coffees this year could present a challenge. “Most washing stations and collection centers are empty and closed on the road and some are operating below their capacity… there will be a serious Washed coffee shortage” she says. Despite this, our sourcing and logistics teams are hard at work to ensure that we’re able to meet the demands of roasters around the world, delivering a variety of microlots from across Ethiopia’s growing areas along with our returning Acacia Washed and Natural Core Coffees.

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