- East Africa
Ethiopia: Coffee dealers up in arms confront PM Zenawi
Coffee buyers not happy with Ethiopian Commodity Exchange
Foreign buyers of Ethiopian special coffee beans have expressed their concern over the introduction of a new auctioning system related to the trading of coffee beans at the Ethiopian Commodity Exchange (ECX). The system was introduced in December 2008.
Prior to the introduction of the new trading system by the Ethiopian government, exporters had the right to buy their preferred beans from any supplier of their choice. However, they now have to compete with other exporters to get their beans. A recent delinkage of exporters with their buyers in Europe and United States has been blamed on this factor.
Exporters are now expressing their discontentment over the new trading system.
In the month of may this year the Specialty Coffee Association of America (SCAA) in a letter to Prime Minster Meles Zenawi, expressed the difficulty in obtaining its usual special brands of coffee due to the new trading system. It stated that it had a strong interest in preserving the value and brand equity already established for Ethiopian coffees in the higher value specialty sector.
SCAA believes that there is market demand for some 7,200tn with a total value in excess of 30 million dollars for specialty coffee qualities.
To keep the mutual interests of both the Ethiopian coffee sector and specialty coffee buyers, SCAA has proposed a working group that will strive towards developing a specialty coffee trading strategy, sources at ECX have revealed.
Reacting to the buyers’ concern, which is communicated through the Prime Minster’s Office, ECX has scheduled a discussion with SCAA and other Specialty Coffee Associations including local exporters. The discussion, they claim, will focus on how specialty coffee needs to be traded in the ECX and other related issues.
Official figures estimate that specialty coffee, which is high-end coffee and sells at a premium, represents about 3.7 per cent of the country’s coffee exports.
The potential of coffee production in Ethiopia is very high as a result of suitable altitude, ample rainfall, favourable temperature, suitable planting materials and a fertile soil. A genetic pool of the country’s coffee contains more than 6000 varieties, giving Ethiopia a huge specialty coffee capacity.
In Ethiopia, the total area covered by coffee is 700,000 hectares, with a total production of roughly 250,000 tons per annum. Around 20 million people make a living out of the commodity. Forest coffee accounts for about 10 per cent of the total.