ADDIS ABABA (Reuters) – Ethiopia moved trade in its specialty coffee to an Addis Ababa-based commodities exchange on Wednesday, instead of selling the beans at overseas auctions.
Up to 30 percent of the beans from Africa’s biggest coffee producer are classified as premium, but higher prices for the fine coffees were not trickling down to farmers, the Ethiopian Commodity Exchange (ECX) said.
“Farmers will receive a minimum of 85 percent of the final export price,” ECX said in a statement. “A historic first for Ethiopia’s coffee farmers who (normally receive) below 40 percent, among the lowest share of the final price in the world.”
Ethiopia, which prides itself as the birthplace of coffee, had been talking to key layers in the global specialty coffee industry since November on how best to handle the trading of premium brands.
Premium coffees will now be traded once a month in Addis Ababa with international buyers given the chance to test the coffee before bidding.
Some 27 international buyers from the United States, Europe and Japan registered to take part in the first trading session on Wednesday. They bid on 44 lots from 35 farmers’ cooperatives and 9 independent growers.
The ECX was set up in 2008 to replace a murky auction system that was often abused by market players.
Ethiopia earned $376 million from coffee exports in 2008/09 down from $525 million in 2007/08.