After arriving in Ethiopia and meeting up with the roasters from Taiwan, our journey began…

From the first day, we knew this wasn’t going to be a normal trip. That was the common understanding that resonated from our group, even from our first self-introductions and discussions.

“For the past few years, why has the price of Ethiopian coffee been increasing as the quality keeps going down?”

We had barely been introduced to Heleanna, the director of Moplaco, when one of the roasters from Taiwan posed the question that had been playing on all of our minds.

(My personal goal for coming to Ethiopia was not to enjoy a vacation, but to discover various problems or contradictions that might be occurring. Along the way, I had the chance to learn about various issues and the current state of affairs, so I will detail them in this blog. I feel like perhaps this was my role in the roaster group we were traveling with. I wanted to share the problems that the Ethiopian coffee industry is currently experiencing. Unfortunately, there aren’t many pictures I can share because I ended up losing my GoPro during the trip…)

The following are things that Heleanna discussed with us.

(*Some of the information may not be accurate, so please keep that in mind as you read on.)

There are two major reasons why the quality of Ethiopian coffee hasn’t been as good these past two to three years. The first is that coffee is being used as a “means” to obtain foreign currency through exports, hence quality is not the focus, and the second is that the unique Ethiopian soil and forest that has been ideal for coffee cultivation is being lost. The overall quality is thus being eroded away.

1) The country is heavily dependent on imports, as the produced items locally are limited. Due to the high demand of Foreign Currency for the imports, Importers have obtained licences to export coffee, so as to generate dollars that could be used for their import needs. This has created a high competition among actors that are no longer coffee people but rather importers that use coffee as a foreign currency earner. Low quality coffee is what they focus on, compromising on the quality to achieve higher returns, with commercial lots.

Coffee Cherry prices have been pushed unreasonably high, creating a market that is no longer internationally competitive.

While other countries average around 60 cents per kilo for red cherries, Ethiopia is currently one of the most expensive countries in the world, with prices ranging around 80 cents per kilo. This year, the price of Sidamo soared from $1.20 to about $1.90. Assuming a simplified price of $2.00, it takes 6 kilos of cherries to produce 1 kilo of green beans, so if a coffee supplier or exporter wants to buy 1 kilo of green beans, the cost is already $12.00. If that is the original buying price, then the finished coffee needs to be sold for at least $16.00/kg.

In addition to the increased number of players in the market- Imagine Brazil exports about 50M bags of coffee but the number of exporters that are truly active is about 60, and Ethiopia exports about 6M bags of coffee but the number of registered exporters is more than 2000- , there has been a lof of speculation over the upcoming devaluation of the local currency. As traders anticipate that they can make windfall profits from Devaluations, they are also active in increasing coffee cherry prices. One would wonder why they would do this, but their thinking is focused mainly on creating a monopoly environment, where they will be alone controling coffee as other people cannot afford such price hikes. But as the devaluation has not come as anticipated, many exporters are faced with stocks that are very expensive but impossible to sell. To sell they reduce the quality in order to reduce the average cost.

2) Each year, two million children are being born in Ethiopia.In the past 15 years alone, more than 30M people have been raised in Ethiopia. The Exponential increase of the population has put an extreme pressure on the land and on the farming families. It is a vicious circle that is difficult to break. More children, means more land to use, and this land is now remaining in the forests of Ethiopia. In addition as the population has little job opportunities, the opportunity to find work other than farming is becoming very difficult. Hence more and more forests are being deforested, in order to obtain land, and more and more biodiversity and coffee is being lost.

The unfortunate event is that the increased cost of living is putting further pressure on these farming families,who also want to grow and live more comfortably hence they turn into cash crops with short returns and high cash yields. Such as Khat and Eucalyptus trees that are more profitable than coffee.

Khat to grow needs direct sunlight, hence the forest is removed around it, and Eucalyptus acidifies the soil, and sucks out every drop of water as well as every mineral in the soil. Nothing grows around Eucalyptus nor after it, as the soil becomes barren and infertile.

How could exporters such as Moplaco, that are focused on Coffee ONLY, actually maintain their quality and demand the fair price, when the market is not displaying a competitive climate that will allow such prices to be charged?

This is a daily question for many exporters that are focused on coffee, and coffee farming.

I will be traveling together with roasters from Taiwan to visit Ethiopia.
Can’t wait to see what kind of experiences await me, who I will meet, and what kind of insights I will gain.
I am really looking forward to it.

But! To tell you the truth, my visa application hasn’t gone through yet….
When you are going to Africa, you can’t expect the same infrastructure and services as in Japan.
But I didn’t expect to face such a challenge even before my departure.
I am not sure if I will be able to leave smoothly, but I just hope that everything will go well since TYPICA is doing a great job with the procedures. But what if I can’t go….

Anyway, I will make all the preparations I can and head to Tokyo tomorrow.

Purpose
I am filled with gratitude for the opportunity to participate in TYPICA Lab.
Now that I have the opportunity to visit a production area, I think it would be better to go there with a clear purpose.
Every time I go to producing countries, I always try to learn about the lives of the local people, especially what is not going well, so I would like to spend this trip focusing on the problems in Ethiopia and the challenges faced by people in different regions and professions.