After spending a week in Ethiopia trying to get a better understanding of what is going on with their new trade model, I will try to explain what my impression is of their new trade situation. Let’s start with the beginning:
Ethiopian Government has changed their trading system for coffee from being traded at an auction as a lot based trade to an exchange trade based on categorized commodity bulk coffees. The reactions from the specialty roasters around the world was immediately negative because a bulk based commodity exchange made it impossible to buy small specialty lots direct from private mills. Some private mills have recently developed special coffees like Aricha micro lots, Beloya, Misty Valley etc. After the new legislations these coffees have no category in the exchange since they are natural processed coffee from Yirga Cheffe. The new rules state that all coffee from Yirga Cheffe is to be sold as washed Yirgacheffe coffee in line with Ethiopias newly branded and trademarked categories. Most specialty roasters will say that this is a tragedy as we are more concerned about our own business and these wonderful coffees than anything else. But before we react with anger it might be a good idea to listen to what the people who have engineered the new system have to say about the situation.
The New legislation is implemented by politicians who believe in the benefits of this new system in long term. After neglecting coffee as the most important income for Ethiopia for many years, the government is now taking action in order for Ethiopia to make more money and add value to their exported wealth.
The Ethiopian government is trying to stop black market sellers and Exporters that did not pay their farmers. They also believe that the new system will be adding value to their coffee in long term by selling it as a trademarked coffee and by owning the rights to these trademarks.
One of the new actions taken is implementing a new punishment in terms of a fine for getting caught smuggling coffee from one region to another. The fine is so severe that it is not worth taking the risk for most coffee farmers and exporters. This law is put to life to try to protect Ethiopias branded coffees such as Yirgacheffe and Sidamo from being blended with other less unique tasting coffees. Black market sales has been a huge problem for Ethiopia and a lot of foreign trade has been lost because exportable qualities have been sold on the black market within Ethiopia.
The new system will be tracking all coffee that is produced and sold to be able to control what exporters are doing with Ethiopia’s black gold.
So, will we get more natural processed coffee from Yirga Cheffe in the future?
Well, it is still possible to buy coffee direct from farms that are more than 200 hectars or from unions and cooperatives.
Although this still does not cover the Aricha coffees as these are milled at a private mill, I am quite optimistic for these coffees in the future, especially after talking to government officials and several exporters. It seems like everyone is open to do whatever is necessary to make dollars for Ethiopia. They are thinking about the benefit of all Ethiopians and not just one single farmer or exporter.
The new system has just been put to life and since Ethiopia was desperate to change their way of trading coffee, the rules so far only concerns the bulk coffees (where after all Ethiopia is getting most of their income from foreign currency trade.)
Since specialty lots has not been a huge export for Ethiopia, these coffees have been put in 2nd place so far and will probably be handeled and promoted when the new system is running smoothly.
Therefore it looks like we can buy coffees such as sun dried Yirgacheffe direct from private mills in future years. We only need to be a bit patient. After all this change is made to protect Ethiopias most precious trade and the farmers who are making some of the very best coffees in the world.
