GEOGRAPHY & CLIMATE:

The Country is located in East Africa bordering on the Red Sea.

It covers a total area of about 474,903 sq. miles and has a population of 58 million. Climatically it has a light rainy season from January to February and a heavy rainy season from June to September.

COFFEE BACKGROUND:

All Arabica coffees of the world are indigenous to Ethiopia, from the province of Kaffa which means coffee. The theory is that the coffee grew wildly (before the existence of man whose traces in Ethiopia are the oldest in the world) to the northwest of the capital Addis Ababa, on the island of Lake Tana, where the use and cultivation were fostered, according to the legend, by monks who needed to keep themselves awake during the night long religious ceremonies.

SPECIES: Arabica

ALTITUDE AT WHICH GROWN: 4,000 - 6,000 ft.

PREPARATION METHOD: “Washed” (15%) & “Unwashed” (85%)

ANNUAL PRODUCTION: 3,833,000 bags (99-00 crop)

SHIPMENT PERIOD: December - August

TYPES OF COFFEES OFFERED:

Washed Yirgacheffe Grade 2: Grown in the Sidamo region, it is the best highland grown Ethiopian Arabica coffee and has a unique lemon peel aroma. It has medium to pointed acidity and a good body, well balanced cup of good moka flavor.

Washed Sidamo Grade 2: Grown in the Sidamo region south of the capital Addis Ababa. It is a good quality coffee with attractive style with a well balanced acidity and body. Occasionally we have received shipments with excellent flavor that can be compared favorably with some of the Yirgacheffes.

Washed Limu Grade 2: Grown in the Limu region which is to the west of the capital Addis Ababa. Also a good to fine coffee with balanced acidity and body. In fact in 1989, we had received the finest delivery of Washed Ethiopian coffee we have ever received till today. Strangely, it was a Limu Grade 2. It was so good that I had asked Steve Sloat back in the days of Beanbag Storage to send out one bag to my house. I kept this bag in my garage for some time and roasted out on my sample roaster for my personal consumption and for my close friends!

Unwashed Harrar Grade 4: This coffee is grown in the Harrar Zuriya province to the east of capital Addis Ababa. It is excellent, soft, fragrant, irreplaceable and incorporates itself very well in choice blends. It has tangy acidity, light body and an exotic typical moka flavor.

Personal Comments:

ETHIOPIA 2014/2015 CROP ASSESSMENT - 10/14/2014

Ethiopian Coffee Production for the year 2012/13 was 486,000 Metric Tonnes, out of which Washed Coffee was around 145,886 Metric Tonnes and Unwashed Coffee was 291,772 Metric Tonnes. However, production for the year 2013/14 declined to 450,000 Metric Tonnes. Out of this, 30% was washed coffee and the remaining was unwashed coffee. The consumption of coffee in Ethiopia which comprises mostly of all the undergrades is very high, leaving only the washed and better quality of unwashed coffees for export. For reference, the exports of coffee from Ethiopia for the last 5 years were:

Year 2009/10 – 172,000 Metric Tonnes
Year 2010/11 – 196,000 Metric Tonnes
Year 2011/12 – 169,000 Metric Tonnes
Year 2012/13 – 199,000 Metric Tonnes
Year 2013/14 – 282,000 Metric Tonnes (estimate)

ETHIOPIA 2011/2012 CROP ASSESSMENT 7/25/12

Ethiopia export for the first ten months of last year amounted to 113,632 MT for the first ten months, 28% lower than the previous year, from a total production of 498,720 MT.  60% of this was washed and 40% unwashed.  Next year's production is assumed to be the same as this year's.

ETHIOPIA 2010/2011 CROP ASSESSMENT - 6/29/2011

Ethiopia’s export last year amounted to 133,992 MT from a total production of 480,260 MT.  Washed coffee was 40,198 MT and Unwashed coffee 93,794 MT.  Figures for 2010/2011 are 172,210 MT for export out of a total production of 449,163 MT of which Washed is 51,600 MT and Unwashed is 120,610 MT.  Next year's production figures are assumed to be the same as 2010/2011.

ETHIOPIA 2009/2010 CROP ASSESSMENT – 5/25/10

Ethiopia's production is quite the opposite of Kenya's. It is up significantly from last year's to 480,000 Metric Tonnes. However they are not immune to escalating homegrown problems. First of all, there is the shortage of electricity, which results in its rationing (detailed below in last year's assessment) which continues to worsen. In addition, there is a continued bottleneck of containers piling up at Djibouti, which happens to be the only viable port from which to export to the rest of the world. The storage and port handling charges have significantly increased, and compounding the cost, is the growing cost of transport fuel to the port. This situation seems to have no solution for the foreseeable future and is best characterized as chronic and incurable.

Our job at Moledina Commodities is to insulate our customers from these headaches and provide the best service quality coffee possible.

ETHIOPIA 2008/2009 CROP ASSESSMENT – 3/9/09

The 2008/09 estimate is around 368,000 metric tonnes and if the current favorable weather continues, we project the 2009/10 crop to expand to about 394,000 metric tonnes. The local consumption in Ethiopia still remains around 40% of the annual production.

The high differentials that are currently demanded for the Ethiopian coffees will certainly help the government to receive the much needed foreign exchange from the coffees sold abroad. The global economic crises have not escaped Ethiopia. The government is trying its best to handle the local economy and one of the steps it has taken to tackle the economy is to ration the daily electricity supply to every other day. However, even on the day when the electricity is supposed to be on, it suddenly is disrupted or is turned off completely for the day. This, no doubt, has brought  the coffee industry to a practical stand-still as without the electricity, the coffee processing equipment at the mills, lights needed for hand-picking coffee, office equipment, including telephone, computers etc. all come to a halt. Unfortunately we do not see this situation improving in the near future.

The second deterrent to the coffee industry has been the establishment of the Ethiopian Coffee Exchange (ECX) by the government last April 2008 and which came into operation in December 2008. Prior to ECX, the sellers would bring their coffees on trucks to sell them at the coffee auction. 90% of the coffees would be left on the trucks and the rest of it would be stored and the sellers had 3 days within which they had to put their coffees for sale at the auction. The buyers, after they purchased the coffees from the auction, were able to take the deliveries of these coffees immediately. The buyers also never had to pay for the coffee bags. With the establishment of the ECX, the government has inadvertently brought unwanted bureaucracy in the industry whereby all the coffees are now stored in the government warehouses on behalf of the sellers. But now, the buyers have to pay for the coffee bags, pay storage charges, wait in long lines to take deliveries of coffees as trucks sometimes have to wait upto 20 days in line to pick up coffees. In most cases, the buyers now incur additional demurrage charges. Furthermore, the sellers are now able to store their coffees at these warehouses for upto 3 months. This has led to the sellers speculating and holding the coffees until they feel the prices are high enough for them to sell at the auctions.

ETHIOPIA 2007/2008 CROP ASSESSMENT – 2/15/08 

The 2006/07 Ethiopian crop increased to 321,000 metric tonnes out of which 236,710 metric tonnes was exported. And the reason the Ethiopian coffee industry is continuing to grow and prosper is for the following reasons:

• Increased demand for different kinds of coffee
• Higher world prices
• Improved quality control and inspection systems
• Lowering of certain taxes by the Government

For these reasons we are projecting the 2007/08 crop to continue to expand to around 344,000 metric tonnes.

ETHIOPIAN 2006/07 CROP ASSESSMENT – 3/19/07

The 2005/06 crop in Ethiopia came in at 270,000 tons, out of which 150,417 tons was exported and the rest was consumed locally. It is encouraging to see that the export during the last 3 years has steadily increased from 136,614 tons in 2002/03 to 150,417 tons in 2005/06. This is mainly due to increased production and improved crop husbandry. The Government in its 2006/07 Fiscal Year Policy is encouraging further expansion of exports to 200,000 plus tons to mark the upcoming Ethiopian Millennium.

To every ones benefit, the income of farmers is now on the rise due mainly to sustainable trades. The share of Fair Trade and Organic Certified coffee has increased as well as that of washed coffee.  Of note is that growers in the East and Southwestern producing regions, reacting to the uncertainty of international market prices, have, unfortunately, turned their attention to the production of Qat which fetches ten times as much as coffee.

BUCK’S COUNTY COFFEE COMPANY A DOUBLE WINNER – 6/1/04

In the latest Coffee Review’s blind cupping results, Buck’s county Coffee Company of Langhorne, Pennsylvania took first place in both the Kenyan and Ethiopian categories.

Said Buck’s County’s President, Rodger Owen, “We are delighted to be the recipient of the best Kenyan award. In mentioning the award, Ken Davids, founder and cupper of www.thecoffeereview.com said he considered this lot of Kenya as the finest he had cupped since founding of the award seven years ago. He gave us the highest rating ever, 95 out of 100. He also awarded our Ethiopian Yirgacheffe a grade 92. Both these fine coffees were supplied to us by Mohamed Moledina of Moledina Commodities in., of Flower Mound, Texas. The coffee Moledina provides has made it possible for us to please literally thousand of our customers. We value and are grateful for Moledina’s expertise in the Specialty Coffee Industry and can’t think of a better way to increase sales ….. have the best coffees.”

- 11/1/2003
With by far better weather than expected, the Ethiopian coffee production for 2002/03 period was just over 230,000 tonnes, slightly higher than the previous year’s production. Out of this production, 93,386 tonnes were consumed locally and 136,614 tonnes exported . This is an increase of 34% in local consumption but a 13% decrease in exports. This is quite understandable as with the global prices still below the cost of production, there is no incentive for farmers to export.  The quality also dropped due to the falling revenues’ inability to support proper crop husbandry. 

Some farmers have even uprooted their coffee trees and are instead growing other cash crops. Their favorite is growing Qat, a mild stimulant chewed in most of Eastern Africa and the Arabian Peninsula (except in Saudi Arabia, where it is banned). Qat, which is legal in Ethiopia, yields four crops per year as compared to one crop of coffee.  Qat  fetches as much as 10 times the price of coffee. Who can blame them? 

The 2003/04 crop estimate is little difficult at the moment as the first flowering has not been good due to hot temperatures.  As a result, we will have to wait for the second flowering before we can give our own best estimate. For what it’s worth, however, the Ethiopian Coffee & Tea Authority is optimistically predicting an export figure of160,000 tonnes.  We’ll see …….

- 11/1/2002 
The total Ethiopian coffee production was only slightly less than last years production at 226,200 tons for the budget year of July 8, 2001 to July 5, 2002. Out of the total amount of coffee produced,  69,301 tons were consumed locally while 156,899 tons were exported. Of the coffee that was exported, 46,327 tons was of washed coffee and 110,572 tons was unwashed sun-dried. We found the overall quality acceptable, yet average compared to what we used to see few years ago. 

Due to cyclical effect and the current draught, we expect the next crop to be down by as much as 30 to 35%. Furthermore, the low world prices provide no incentive to the farmer invest in any farm inputs, which is such an essential part of crop husbandry. As a result, the quality should suffer too.

- 10/1/2000
Of the 230,000 tons produced in the just ended 1999/00 cycle, of which 109,697 tons was consumed locally. Out of the balance of 120,303 tons that was exported, 32,073 tons was washed coffee and 88,230 tons was unwashed coffee. Overall the quality was average, as we have seen in the previous couple of years.

- 6/9/1999
Of the estimated 4,400,000 sixty kilo bag crop this year, only 50% will be exported. Of this, 1,650,000 bags will be sun-dried with 550,000 bags washed. While the sun-dried quality is generally good, 30% of the washed is unfit for export. The overall quality is poorer than last year's.

Furthermore, there are two major problems in the Ethiopian coffee industry this year:

1. Due to the breakup of the state run monopoly there are now hundreds of exporters within Ethiopia instead of one. Most of these are inexperienced and know little or nothing about coffee. Unless strict standards are observed when issuing export licenses, the industry will lose a great deal.

2. Additionally, the initial minimum coffee price controlled and set by the Commercial Bank of Ethiopia was too high for the world market earlier this year. At first, exporters did not realize this and began building inventories at this higher price. Shortly they realized the prices were too high compared to similar grades and quality available from other countries. The market for washed Ethiopian went south and inventories at the dock began to pile up. The Central Bank was left with no alternative but to lower the price, first 5-10 cents and now another 30 cents. Everyone throughout the chain from grower to exporter, is unhappy.

With tighter standards on issuing of export licenses, the coffee economy in Ethiopia theoretically should sort itself out now that it has opened itself up to internal competition. However, this cannot happen as long as the Central Bank maintains price controls. In a free market economy, price controls inevitably cause distortions and bottlenecks, of which this current situation is a classic example.

We believe the coffee industry in Ethiopia will continue to be unsettled for the next several years and is no longer a market for the inexperienced. We at Moledina Commodities are grateful for our reliable network of high quality Ethiopian coffee professionals. Without their expertise we could not continue to provide you with Ethiopia's finest coffee.

- 9/14/98

El Nino has not been very favorable to coffee production in the last 2 years. Drier conditions than normal during the flowering season reduced the final output and more than the normal rainfall during the harvest period severely hampered the picking of ripe cherries and eventual sun drying.

In 1995, following a four year transition period, a multiparty democracy was created. This opened the doors for free-market and deregulation of many economic sectors, including coffee. Until then, only the Government entity then called the Ethiopian Coffee Marketing Board was allowed to export Washed Coffees along with about 10 other firms that were allowed to export Unwashed coffees. But since the deregulation, we now have about 70 firms that have got involved in coffee exporting. Those who were dealing with every commodity from cement to orange juice decided to try their hand at coffee exporting. As a result, there are so many inexperienced exporters, although in a minority, trying their luck in coffee business.

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