An update on this year’s harvest and challenges
The Coffee Quest US and Europe made their way to Ethiopia this past December, after a nearly 3-year hiatus due to the pandemic and civil war. It was refreshing to be able to visit and spend time with our export-partners again, and finally check out the Washing and Drying Stations where some of your favorite coffees are produced. However, when it comes to sourcing coffees in Ethiopia, it’s never that simple! Keep reading to learn why and how you can plan your assortment in advance with better options and pricing.
Starting with the Harvest Update:
Let’s start with the good news. The country has reached a peace deal that put the civil war to rest, there are no weather-related issues and overall, production and quality are up (at least in the regions where we visited: Guji and Sidama). Harvest was in full-swing in most of the high-elevation areas and just about to get started in the super high-elevation areas (we visited some Drying Stations that sit at nearly 2,400 meters!).Â
The exporters that we work with are enthusiastic about quality and have even expanded their offerings to reflect this: Daye Bensa purchased a Washing Station in Arbegona, where many Cup of Excellence (COE) winners have come from and Sookoo Coffee has finally dived into the Washed Coffee space! It was still a little early to be cupping fresh crop from the coffees we work with, as they all come from high and super high elevations. However, we did have the opportunity to taste a few of them and quality was significantly better than last year (in both Washed and Naturals).
It's not so simple to source from Ethiopia...
Nevertheless, when it comes to sourcing coffees in Ethiopia, it’s never that simple. This year, cherry prices started effectively at the peak of where they ended last year; they ended last season around 65 Birr/kg and opened up this year at 58 Birr/kg. When we were leaving, we heard prices hit 82 Birr/kg and by mid-January, we heard in Bensa, the prices had risen to nearly 100 Birr/kg!Â
Ethiopia is not only about coffee; with a deficit of foreign currency, the trade is about USD as much as it is coffee. In simple terms, many exporters are also importers and so they take the USD they earn from the coffee trade and re-import goods to earn additional revenue. What this means is that while most coffees will be priced higher compared to last year, there is a ceiling as exporters look to the value of the dollar as much as the green coffee.
Why is the Cherry Price even higher this year?
With the C-Market being down significantly compared to this time last year, the question remains: why is the cherry price even higher (and continuing to rise)? The truth is, no one was really sure where all of this demand was coming from, although likely many are still buying to get access to more USD. What we do know is that a lot of exporters have pared back their buying. This means that intermediaries and producers will have to dry the cherry by themselves, creating what is expected to be a surplus of Grade 2 and Grade 3 Naturals and hence, a shortage of Grade 1 Washed coffees. Most producers, even the ones who produce and sell single-farmer lots, do not have de-pulpers. As such, the only option for the wet cherry is to dry it as a Natural.
Not unique to Ethiopia, but we did hear that prices for cars and property are down for the first time in Ethiopian history! This is likely due to the same macroeconomic conditions that every other country around the world is facing. However, part of the reason for this, and what we found interesting, is that banks have tightened up liquidity by not giving out as many loans; they know and understand the coffee trade and are concerned about the risk that lies with some of the smaller exporters. So that leaves the same question: if there is less liquidity, how can cherry prices continue to rise in the mystical lands of Ethiopia?
We have already signed contracts for the bulk of our coffees this year and we are excited that quality is back on par to prior years. We are also excited about the coffees from the new projects of our exporters. Contact us today, and reserve your top Ethiopian lots ahead this year!
Until next time,
Stephen
The Coffee Quest has set up 2 options for you to get early access to the Ethiopian lots and discuss pre-booking at special forward prices.
- Join fresh crop cuppings at our labs in Austin, TX (US) or Amsterdam (NL)
- Request PSS from signed contracts
Check the link below or fill in the form to get involved!