Tuesday, March 17, 2009

Ethiopia

Ethiopia has become even more of a strange and mysterious place from which to get coffee.  A lot has occurred in the past couple years.  As you probably know, I think the Ethiopian government is taking missteps if they think they're going to improve their coffee economy.  The regional trademarking of Yirgacheffe, Sidamo, and Harrar... how will this affect us?  Will it limit the coffees we can get?
Here is some more news out of Ethiopia:

Ethiopia Update - Aricha and Beloya to Take Final Flights to Roasters around the World
Posted on 04. Mar, 2009 by Joseph Brodsky
The last chance to buy Aricha and Beloya is upon us. Due to an unexpected development in Ethiopia in recent days, all coffee will be sold within a week.
On Monday, The Ethiopian government issued a mandate for all coffee exporters to liquidate all coffee stocks. Within a week…
The country is starved for foreign currency. The exchange rate for the Ethiopian Birr against the dollar was bumped up to 12 Birr/$ in recent weeks from around 9 this time last year to encourage an influx of cash. The dollar goes a long way in Ethiopia these days. In a worsening global credit environment, borrowing foreign currency becomes increasingly difficult for nations dependent on it to run their operations. An excess of coffee inventory is much more valuable as cash in the bank from a national perspective.
So all 2008 coffees must go, quickly.
It is amazing how this has jump-started shippers into action. Some are obviously longer on positions than others, and this creates quite a problem for them.
What this means for Ninety Plus Coffee is that coffees it handles from 2008 - including all remaining Aricha and Beloya Macro and Micro Selections will ship next week.
The current situation with a lack of much specially prepared coffees this year due to the new ECX regulations, remaining Aricha and Beloya coffees are in high demand.
Please contact Steven Holt: +1.303.884.2380 or steven@ninetypluscoffee.com to find out how you can receive these coffees for shipment by air and sea next week.
We have around 60 bags of Micro Selection coffee remaining at the time of this entry. The coffees have been cupped in Addis several times this week and will be cupped again by Ninety Plus guests Tim Wendelboe and Paul Geshos.
There will be no time to sample Micro Selection coffees prior to purchase. Buyers will have to go on the cupping reports.
Say goodbye to Aricha and Beloya with us in style.
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Coffee exports plummet below target
SATURDAY, 14 MARCH 2009
By Hayal Alemayehu

Coffee exports are sharply falling below the target set for the year with falling world prices exacerbating the situation, it was learnt.
The government set a target of over 101,000 tonnes of coffee to be exported during the first seven months of the current fiscal year while the actual export stood at 66,000 tonnes, thereby decreasing the forecast in coffee export earnings by over 46 percent.

The world coffee price per pound has plunged by some 67 cents over the last several months following the global financial turmoil-one of the major culprit for the country’s sharply falling coffee exports-operators in the sector noted.

The Ministry of Agriculture and Rural Development had last week warned coffee exporters against hoarding which it believed has a major contribution to the sharp drop in coffee exports, according to observers.

Major operators in the sector, however, say that the drop in coffee exports is directly linked to the global economic crises, bringing down world coffee prices to one of their lowest level in decades.

“Major coffee buyers such as Star Bucks, which had to layoff tens of thousands of employees months ago, are finding it hard to access loans from banks to buy coffee in bulks,” a mojor coffee operator told The Reporter on condition of anonymity. “This has led [coffee] prices to tumble down which, in turn, makes us unable to export as much as we could.”

Despite government urging for more coffee exports, the situation has yet to improve, government export figures indicate.

Only 7.4 thousand tonnes of coffee were exported in January 2009 against a 22,000 tonnes export forecast for the month, according to the latest export figure. Likewise, earnings from coffee dropped by a sheer 400 percent against the target for the same month.

However, earnings from coffee exports during the first seven months are slightly higher than that of the same period of last year.
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Starbucks Delays Ethiopian Coffee Research Center, Capital Says
By Jason McLure

March 9 (Bloomberg) -- Starbucks Corp. put on hold plans to build a coffee research center in Ethiopia because of the slowing global economy, Capital said, citing Vivek Varma, a spokesman for the company, and Ethiopian Prime Minister Meles Zenawi.

Starbucks’ then chairman and current Chief Executive Officer Howard Schultz said during a visit to Ethiopia in November 2007 that the company would open a research center to improve the quality of Ethiopian coffee, the Addis Ababa-based newspaper said. A similar facility in Rwanda has also been put on ice, Capital said.
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Ethiopian Government Urges Japan to Lift Ban on Coffee Imports
By Jason McLure and Ichiro Suzuki

Feb. 20 (Bloomberg) -- Ethiopia urged Japan to lift a ban on imports of its coffee, saying the Horn of Africa country has taken measures to prevent pesticide contamination that led Japan to halt purchases last year.

“It’s time to put the Japanese market back and this has already been communicated to them,” Ethiopian Trade Minister Girma Birru said in an interview in the capital, Addis Ababa, on Feb. 17. “I think this is a problem we can leave behind us.”

Japan halted deliveries of coffee from Ethiopia in May after finding “abnormally high” pesticide residues in a shipment of the beans. Japanese officials demanded that Ethiopia find the source of the chemical and prevent future contamination.

Ethiopia is Africa’s biggest coffee producer. Japan had previously purchased about 20 percent of the country’s exports, said Girma, making it the nation’s third-largest market after Germany and Saudi Arabia. Ethiopia exported $525.2 million of coffee in the fiscal year ending July 7, according to the Trade Ministry.

Girma said the coffee shipment that led Japan to halt imports probably was contaminated by growers using sacks that previously contained insecticides or other chemicals. Most Ethiopian coffee is produced by smallholders who grow the beans without chemical sprays, he said.

Mocha beans from Ethiopia are highly regarded in Japan for their distinctive flavor and last year’s ban forced coffee shop owners to seek new blends.

No Beans

“We haven’t been able to offer Mocha coffee since last November because the supplier said they have no supplies of Ethiopian coffee beans,” said Takayasu Ito, a coffee shop manager in Tokyo’s Jimbocho neighborhood.

Japan will lift the ban once it receives assurances from Ethiopia’s government that there are no “reappearance risks,” Hiroyuki Uchimi, chief of the inspection planning section at Japan’s Health Ministry, said in a phone interview on Feb. 18.

Measures taken by Ethiopia to prevent a recurrence of contamination include establishing a laboratory to check for impurities in export coffee.

“We are now going to make clean all the coffee from smallholders or from state farms,” Girma said. “We have everything ready.”

3 comments:

Brian said...

Here's another report on Ethiopia from Tim Wendelboe, who owns a roastery in Norway:
http://timwendelboe.no/category/ethiopia/

Audra said...

The Ethiopian coffees are consistently my favorites. So, it is with some bit of selfish frustration that I've researched what is going on. I also have some serious questions, though, about how the new regulations are supposed to benefit the workers/farmers/co-ops in the long run.

Based on the limited amount of information I've read, it sounds like, because the Ethiopian government wants to keep such strict controls over the coffee exporting, it's going to force everyone to liquidate their stocks of coffee to get foreign (more valuable) currency into Ethiopia. If I understand it correctly, they're also requiring, at least in the short term, the mixing of coffees from different co-ops for...what? Mass exporting? I'm not quite clear on that. What I do understand is that the fantastic coffees like Misty Valley and Aricha that we've been so lucky to have will not be available in the form Brian's found them so far (the excellent micro-lots), and we won't be able to trace the origin of whatever coffee is available, because it's all going to be combined.

It sounds like the government is doing this ostensibly because of some "black market" sales of the coffees. What I am completely unclear on is what "black market" means. This isn't an illegal product; in fact, it's to everyone's benefit if the farmers/co-ops/exporters are able to sell it at the highest price, which is what coffees like Aricha were going for. So, I'd love it if someone could chime in on what the "black market" is and what danger it presents. And I'd also love to hear how combining really excellent micro-lots like Aricha with other beans from who-knows-where-or-what-quality is going to help anyone other than mass purchasers or the Ethiopian government.

I found Tim Wendelboe's website, too, and I like a lot of what he has to say. He's concerned, too, but he seems to be hopeful this is a temporary situation. It seems pretty serious to me, both for my own selfish desires and for those organizations/farmers in Ethiopia who have been striving to get great prices for high-quality coffees. I may try to contact Tim, who has witnessed some of this firsthand in his travels, and see what he has to say. I'll pass on whatever I find out. And keep us updated, Brian, on what you find out.

Tim Wendelboe said...

Hello.
I think we are all concerned about the great coffees of Ethiopia and what is going to happen with them in the future.
Maybe one big change for the better is to start educating the farmers, co-ops and Unions that we are still able to buy direct from in order to help them increase the quality of their lots. We see similar things going on in Kenya with great success.
Therefore I really hope The Ethiopians try to not only brand their coffees but also improve the coffees in order to raise the price based on quality and not only marketing.

It will be interesting to see what happens...

Tim W