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Being the birthplace of coffee, Ethiopia is arguably one of the most interesting producing origins due to the incredible range of flavour profiles it can produce along with the degree of mystery that surrounds the coffee industry there. It is by far the hardest origin to work with due to the number of different players in the supply chain and the bureaucracy involved, but it is absolutely worth the effort!

It is globally accepted that coffee originated in Ethiopia due to the fact that it was in this country that the crop truly started to flourish and was first consumed by humans. The story of its discovery is mostly fictional, though fact probably lies at the heart of it somewhere! Legend has it a goatherd named Kaldi discovered his animals behaving strangely after consuming the fruit of a particular tree. He tried the fruit for himself and started to behave similarly, feeling energised and slightly hyperactive. Word soon spread to the local village where a preacher hurled the fruit onto a fire declaring the cherries the work of the devil. Shortly after, the air was filled with the aroma of roasting coffee upon which he relented, declaring such a fragrance to be surely the work of God!

Ethiopia has had a strong coffee culture ever since and it has the largest internal consumption of any other producing country with 60 per cent of the coffee produced being sold to local buyers. Ethiopia produces a wide range of coffee with each region’s beans having very distinctive characteristics making some of these the best and most sought after in the world. Key producing regions include Harar, Sidamo, Yirgacheffe (in Sidamo), Limu, Djimmah, Lekempti and Bebeka. Ethiopia is the largest coffee producer in Africa and in the Arabica league is third, in the world with a production of between 4 and 5 million bags.

Coffee in Ethiopia has been traded on the Ethiopia Commodity Exchange since 2008. The ECX was established to create a new market place which served the needs of all of the actors involved in the coffee supply chain, from the farmers to the final consumer. Previously, only a third of all the agricultural products produced in Ethiopia reached the market due to the high costs and risks involved with trading. There was no assurance of product quality or quantity which meant buyers would only trade with suppliers they knew and trusted. This resulted in many of Ethiopia’s agricultural producers becoming isolated from the market, forcing them to sell their produce to the nearest buyer, and leaving them unable to negotiate on price or improve their market position.

With the introduction of the ECX, coffee exports in Ethiopia have become centralised enabling more smallholder producers to have access to the global market. Ninety per cent of all the coffee produced in Ethiopia now moves through the ECX where it is cupped and graded according to flavour profile and quality. Since its inception in 2008, the ECX claims to have introduced:

  • Market integrity – by guaranteeing the product grade and quantity and operating a system of daily clearing and settling of contracts.
  • Market efficiency – by operating a trading system where buyers and sellers can coordinate in a seamless way on the basis of standardized contracts.
  • Market transparency – by disseminating market information in real time to all market players.
  • Risk management – by offering contracts for future delivery, providing sellers and buyers a way to hedge against price risk.

This system seems to have been successful in giving more smallholders access to the market and can result in some really consistent stand out lots with incredible flavour profiles. The downside for the speciality buyer is the inability to access information about the precise origins of the coffee. Coffee moving through the ECX is marked generically for export based on the grade and quality, it is impossible to know which smallholders have contributed towards the lot you are buying. Times are changing however with a new USAID supported traceability program being introduced to the ECX which hopes to link bags of coffee traded through the national auction to the washing and hulling station that it was processed at. This will hopefully provide us with much more information about the growers that have contributed towards the coffee we purchase.

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