ECX

ECX

Prior to arriving at the ECX, we visited the central liquoring unit for coffee and tea, which is a couple of km from the ECX. At the time it was not heaving with Lorries, due to the peak time for exporting not yet being underway. We were greeted by Fatua who heads the coffee liquoring operations. She patiently explained they deal with some 30 containers of green coffee in a day (approx. 300 bags/60kg); whilst the state run dry mill adjoined to the liquoring unit could process some 40,000 tonnes in peak season. The main point stressed throughout the chat was the importance of a universal and standardised grading for all Ethiopian coffees being exported.

Fatua explained the CLU's grading system for exports, which differ from the domestic grading procedure of the ECX. The CLU essentially focuses on raw defects, moisture contents, cup quality (5 cupped), and bean size to assess the grade. Though there is some variation wet processed and natural sundried coffees and unwashed grading, such as allowances for moisture, all coffees are graded from 1-5. This though can be deceptive as sundried natural coffees such as Harar and Jimma both obtain averages of 4/5 due in part to the raw defects associated with the method. But in the former case of Harar coffees still retain high prices due to their unique cup qualities.

The 300g samples were selected from the awaiting trucks (some 20 bags) which were roasted in one room, and then other samples from the same lot were checked for raw defects by ladies in a separate booth. All bags are sampled for moisture contents. Then the coffee is cupped in the five round way, the Q graders are not aware of the owner of the coffee.

I asked Fatua , how much green coffee is rejected, and sent back to the exporter. I had heard under grading and over grading coffees had been known to occur. She frankly stated not too much, but rejection does occur, and when it does it's the responsibility of the owner to redress the matter.

We cupped a range of coffees from some well-known Ethiopian regions and varieties. It is always exciting for me to grapple with cupping, and build up and maintain my mental database. The cupping consisted of this current year’s crop with the exception of Harar : washed Yirgacheffe ( spell it how you will), Sidama, Limu and sundried Harar, Lemkempti, Tepi, Illubabor, and Bebeka. In this case all were commercial grades and regional locations were not a paramount issue, due to the exporter blending the coffees. I actually came away thinking more about the potential of Illubabor varieties in blends, which pleasantly surprised me.

Next we headed the commercial Ethiopian Commodity Exchange ( ECX), for the afternoon coffee trading session. The ECX is the hub for commodity contracts for green coffee and grains such as sesame seeds. It started trading in 2008, according to the ECX stats it currently accounts for 80% of all green coffee sold in Ethiopia, and overall trade of green coffee accounts for 42% of transactions. It has some 400 certified and paid members, and as Abduham explained they represent a further 9,000 interested parties. You also have to pass an exam prior to being allowed to trade. The ECX provides storage facilities (17 warehouses), domestic grading, electronic pricing system, and a legal system regulating trade and payment. The info may be a slightly verging on blurb. But it became apparent understanding the factual role of the ECX, helped when discussing coffee in Ethiopia.

The ECX itself was a hub of information, with the electronic boards being updated with the New York C prices, and on the right hand side boards with green coffee lots being listed by variety, grade, region, crop year, processing method, volume and price range. For example on our day the New York C traded at $2.28 per Ib, with a change price of 0.50 , showing it was up since the trading had started at 2pm.

The lots seemed to jump from commercial to specialty. I watched the no sell of 5UWNA12 Q1, this refers to the current crop year of 2005, unwashed specialty, grade 1, Kochere A (region), from the warehouse in Dilla. This was selling within the range of 1700-1850 birr per 17kg, up by 5% on the day before, and only slightly up on last year’s price.

On the trading real business of securing contracts went on between representative sellers (green jackets) and respective buyers (camel jackets), with independent adjudicators in the white shirts. The trading lasts for 5 minutes, by the end of the bell, the coffee is either sold , which is signified by a visual hand clap and exchanging of papers, or the coffee lot roles over and has to be sold within the next 30 days.

Adbuhman explained the maximum time for green coffee to be held by sellers in warehouses is 6 months, from the moment of being graded. Once it is exchanged on the ECX the buyer can only store the coffee for a month, before selling it on. In both cases fines would be incurred, if over the allocated time period. Both offences incurred fines, with the point being to curtail disruption of supply and demand, regardless of market prices at the time.