Ethiopian Commodity Exchange

Ethiopian Commodity Exchange

Groundbreaking development in Ethiopian law

Groundbreaking development in Ethiopian law opens new opportunities for farmers and coffee roasters by enhancing traceability and quality in the Ethiopian coffee market. Under the previous law, all privately-owned washing stations (primary processors that turn freshly harvested coffee-cherries produced by small-holder farmers into parchment-coffee) had to sell their parchment coffee at the Ethiopian Commodity Exchange (ECX). Established in 2008, the ECX was meant to reduce price volatility and incentivize farmers to plant crops.

For coffee, Ethiopia’s largest export product, the loss of traceability at the ECX did not meet the consumer’s demand for more traceable, farmer-specific or organic certified coffees.

New developments in
Ethiopian coffee market

On the 10th of April, our permanent team on the ground in Addis Ababa received the news that – in collaboration with the Coffee Board – the Ethiopian government has approved a trial that will allow coffee to be sold outside the ECX, starting April 30th, 2017. Exporters in possession of a valid export license will be allowed to sell directly to international buyers, under the condition that trucks of parchment coffee will be sold within three days of arriving at the processing warehouses in the capital. If the coffee remains unsold after three days, it will be sold on the existing ECX platform, but with traceability intact. The new rules result in a system very similar to the one existing until 2008.

Connecting farmer and coffee roaster

This new development empowers the farmers, equipping them to develop direct long-term relationships with coffee roasters, something that Trabocca has been facilitating for over 13 years. With the right involvement from stakeholders, effort and knowledge it will also result in improved coffee quality. This is exciting for all parties in the supply chain!

Ethiopia’s economy

Ethiopia’s economy is growing at 10% per annum, but the depreciation of the Birr results in a shortage of foreign currencies, which Ethiopia needs to pay for imports. The issues during November and the resulting ‘state of emergency’, which is still in effect, may have had its effect on lower exports as well. A more open and export friendly law could be a long-term solution for traceability and quality in the Ethiopian coffee market.

Ethiopia’s flavor profiles

At Trabocca, we consider the new rules a great step forward for Ethiopia and the International value of Ethiopian coffees. Of all countries producing specialty coffee around the world, Ethiopia has by far the broadest range of flavor profiles. As the birthplace of Arabica coffee, Ethiopia offers thousands of unique, beautiful varietals. It is time for the value of Ethiopian coffee to be recognized and fully appreciated again by roasters and consumers around the world. This country has so much more to discover, develop and deliver, it is mind blowing.

About Trabocca

Trabocca is a supplier of specialty and certified green coffee, supplying coffees from outstanding producers to some of the most well-regarded coffee roasters worldwide. Trabocca was founded in 2003 by Menno Simons together with The Organic Corporation. Menno was responsible bringing the first organic auditors to Ethiopia to certify coffee and sesame. In 2005 Trabocca started the project ‘Upgrading Ethiopian Coffee Quality’ which resulted in a USD 800K investment in equipment and infrastructure from Trabocca and the Dutch government.

In 2011 Trabocca started a similar project in Cape Verde, resulting in the re-birth of a 300-year old dormant coffee industry. This coffee is currently featured by Starbucks as part of their ‘Starbucks Reserve’ line-up. Trabocca’s model aims at actively adding value in producing and consuming countries by upgrading the quality of entire supply chains through pre-finance, hardware and know-how. It’s all about quality!