On the Auction Trail in Africa

I recently had the opportunity to travel to Kenya and Ethiopia – my first trip to East Africa and the “birthplace of coffee.”  In Kenya, my travels took me to Nairobi and Mombasa for a visit with our Kenyan buying agent and to attend the East African Fine Coffees Association (EAFCA) convention there.  The consensus of information from Kenya indicates that, due to dry weather, their crop will be reduced from its average size of 60,000 MT down to approximately 42,000 MT.  As one might expect, this all around tightness in supply, seen across the spectrum of grade qualities offered, has put upward pressure on prices.  We will continue to bid for Kenya coffees to secure an adequate supply of coffee for our inventory.  The producers at EAFCA were all focused on increasing their specialty coffee production and exportation since coffee is the main cash crop for nearly all of these coffee producing countries.  Attention to detail in processing and production, continued improvements in agronomy and research, and accurate quality control will all contribute to greater quantities of their coffee attaining “specialty” coffee distinction. 

The increased focus on specialty coffee promotion is seen quite readily in Ethiopia, the second stop on my trip.  The main purpose of my stay in Addis Ababa was to meet with our current Ethiopian coffee suppliers, introduce ourselves to possible new suppliers, and to participate in the first specialty coffee auction of the Ethiopian Commodity Exchange (ECX) through their new Direct Specialty Trade (DST) division.  The ECX public/private partnership recognizes and promotes the benefits that can be gained by both sellers and buyers if DST is successful:  quality differentiation for farmers of high-scoring (SCAA grade 80 or higher) coffees, price discovery for coffees with these specialty attributes, traceability from the farmer/primary cooperatives to the buyer, and an increased share payment (85%) of the FOB export price guaranteed to the smallholder farmers. 

On the day before the DST auction, I went to the ECX grading facility in Addis Ababa for a cupping session of the coffee lots offered – 2 natural and 42 washed coffees.  After examining roasted samples and cup testing each coffee, I made a list of the coffees I had rated highly.  Then on February 18^th, the first bidding session of the DST took place.  On the trading floor of the ECX, a group of pre-registered, international buyers gathered with the Ethiopian sellers in the middle of the trading pit and the bidding began.  I was excited to participate in an open outcry bidding forum – the first time I have done so in my many years in the coffee industry.  And it was especially rewarding to do business face-to-face with the farmers and/or cooperatives who had produced and brought these great coffees to market.  Royal Coffee NY was the winning bidder on 3 lots of FTO Yirgacheffe coffee:  Lots S003 and S027 from the Konga Coffee Farmers Cooperative and Lot S015 from the Jirmi Wacho Farmers Cooperative.  We are also sharing auction lot S019 – an Ethiopian Natural Limu from Nigusie Lemma Edeto Coffee Development – with Royal Coffee Emeryville.  Out of the 44 lots of coffee available for this first auction, 16 lots were sold.

We will be shipping these auction lots to New York in March and expect them to arrive by the end of April.  Contact your sales rep for the cupping notes on these special lots of coffee so you do not miss out – place your orders as soon as possible. 

 

Keep an eye on our offering list for the auction lots we purchased:

FTO Ethiopian Yirgacheffe

• Lots S003 and S027 from the Konga Coffee Farmers Cooperative
• Lot S015 from the Jirmi Wacho Farmers Cooperative

 

Ethiopian Natural Limu

• Lot S019 from Nigusie Lemma Edeto Coffee Development

 

~ Richard Borg