There are already cases in Ethiopia where coffee price making by farmers is happening.
By Andualem Sisay |
“There are already cases in Ethiopia where that [coffee price making by farmers] is happening. The unions of Yirgachefe, Oromia, etc, they have already set their prices. And those prices are not related to New York prices,” says Timothy Chapdelaine of Trabocca, a coffee roaster in North America on a two-week long tour of Ethiopian farms with two dozen other roasters.
“Last year their prices were much higher. Those prices has been going up and Ethiopian coffee is becoming expensive.” he adds.
However, the country has not yet been able to reverse the declining trend of country’s export earnings from coffee. The earnings have been declining over the past five years reaching $780 million last year from close to $842 million at the previous five-year peak, according to ministry of trade statistics.
As Mr Chapdelaine notes, the traditional practice of setting prices for agricultural commodities like coffee by global traders at international commodity markets is now changing.
Improvements in coffee quality, infrastructure and logistics as well as the integration of Ethiopian Commodity Exchange (ECX), the unions and individual farmers are contributing to price increases of Ethiopian coffee on the international coffee market.
“When those components are in place, the ability to pay higher prices for that coffee is greater,” Mr Chapdelaine said while speaking to reporters on Thursday in Addis Ababa.
Aided by ECX short messaging on global prices, Ethiopian farmers are now making informed decisions, which is helping them get better prices for their coffee. Every month ECX is getting a million SMS requests on the global price of coffee from smallholder farmers, according to Ermias Eshetu, the chief executive of ECX.
“Ethiopian coffee varieties in most cases are categorized as specialty coffees, which we have not been able to market. Now there is a potential to identify a particular variety so that farmers can earn more for their hard work,” Mr Ermias said.
Reports show that coffee farmers in Ethiopia were getting less than 10 per cent of the profit from their beans, which are finally sold for up to $3 per cup in coffee shops abroad.
Promoting Ethiopia’s different coffee origins such as Yirgachefe is important for the country in order to make them specialty and get paid more for them, according to Vanessa Adams, director of ACDI/VOCA, the US non-governmental organization that arranged the coffee farms tour in collaboration with ECX.
“Some coffees have different flavor profiles and qualities. We all talk about Yirgachefe or Harar, the ones which are the most recognized. But there are other coffee origins in Ethiopia – Sheka forest coffee, Fugi, Wollaita, Amaro, Limu, Nekemt, et cetera. Those who live here know that, but the world doesn’t know,” she said.
Ms Adams stressed the need to continue promoting origin, increase investment in washing and storage and bigger coffee farms as among the major contributors for increased incomes to farmers and the country in general.
“Things are moving in the right direction already and I think they will continue to. To be honest I think in this area there are a lot of opportunities for Ethiopia,” Mr Chapdelaine said.
For now, whether promoting specialty coffee based on origin can reverse the declining incomes from exports and the negative effects of fluctuating global coffee prices, is yet to be seen.
Source: Africa Review
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