From the Pit-an update on the ECX developments

Yesterday, in Addis Ababa, specialty coffee buyers went face to face with sellers in the Ethiopian Commodity Exchange (ECX) trading pit as part of the newly launched Direct Specialty Trade (DST) initiative. Sixteen lots sold at prices mostly in the range of USD$2.60 to $2.80 per pound, with a high price of USD$4.02. Full results can be viewed on the ECX web site:

First time out, you could see the discovery process in action as buyers and sellers worked to find equilibrium. A few lots didn’t receive offers and a others did, but the offers did not meet the sellers reserve. However, as the auction moved along, deals were made and in some cases, applause echoed through the exchange, reports were quickly called in, and you could almost hear the celebrations beginning in the villages. I spoke with representatives from Nigusie Lemma Edeto Coffee Development Enterprise, who sold an unwashed Jimma for $2.90, and their feeling was that coffee normally would have been sold for at most half of that price but DST gave them an opportunity to pull this higher quality lot out and direct it more appropriately.

There were certainly suggestions for improvement and the buyers expressed a clear desire for more higher grades coffee (85+), but in the end, I believe everyone left encouraged. In talking with Geoff Watts (Intelligentsia), he said it seems to be a viable system that presents a new opportunity for growers who don’t have direct market access to get their coffees in front of a new audience. And in the same light, it provides an opportunity for buyers discover new coffees.

The general sentiment from cooperatives was that it’s now becoming clear that the DST provides the incentive for them to invest in quality. Moving forward the DST should continue to advance the opportunities for producers to bring exceptional coffees to market and receive the rewards for their work.