How Ethiopian Coffee is Traded and Introduction to Ethiopian Coffee Bean Prices

Ethiopia's Coffee Export Systems

According to Ethiopian regulations, there are three coffee export systems: (1) the largest system, of private processing plants exporting through ECX bidding; (2) the cooperative system; and (3) the single-farm system. Among the three, cooperatives and single estates can export directly without going through ECX bidding, which means they can offer completely reliable traceability, or product history.

When tracing back to the source, however, cooperatives still purchase cherries collected by small farmers for centralized processing, so they are not 100% traceable. Single farms are ultimately the only possibility for moving toward full traceability.

Source: ECX

Ethiopia Commodity Exchange

The "Ethiopia Commodity Exchange" (ECX) was founded in 2008 by Eleni Gabre-Madhin, former senior economist at the World Bank and director of the International Food Policy Research Institute (IFPRI). ECX's founding purpose was to establish Ethiopia's and indeed Africa's first commodity exchange, introducing modern trading rules and technologies such as pricing mechanisms, warehousing logistics, and instant communication to change Ethiopia's agricultural market situation of high transaction risks and costs, and to build an effective, reliable, and transparent commodity market.

ECX was widely praised at its inception, believed to have the potential to revolutionize Ethiopian agriculture and reduce famine and poverty. According to widespread media coverage, ECX claimed that through rural cooperatives it provided market access to over 2.4 million small farmers.

ECX Coffee Trading Operation Model

ECX's coffee trading model works roughly as follows. First, farmers sell coffee cherries to local washing stations; some washing stations pay higher prices to buy better-quality cherries. The washing stations send processed green beans to delivery-station warehouses.

ECX then acts as a "distribution center," achieving the following:

1. Better price protection, purchasing beans from farmers at stable and relatively favorable prices and then stockpiling them;

2. Coffee grading, so that higher quality commands higher prices;

3. Timely information, so coffee farmers can immediately get trading prices, the processing stations in their area, the coffee warehouses in their area, and other information by phone;

4. Establishment of warehouses and processing plants; as of 2012, Ethiopia had 56 warehouses distributed across 17 locations, with 9 locations having coffee warehouses, reducing transportation costs.

Taking the Yirgacheffe region as an example, the delivery station is Dila. Green beans are labeled according to production area and graded on quality and cupping results. Higher overall quality sells for higher prices. Traders purchase green beans through ECX, but the packaging indicates at most the production area and village, such as "Yirgacheffe: Konga" or "Yirgacheffe: Kochere."

Ethiopia Coffee Cooperative Names and Introductions

Farmers' Cooperative Union

To facilitate direct export for farmers' cooperatives, various farmers' cooperatives have formed their own cooperative unions. Ethiopia now has 6 cooperative unions:

● Oromia Coffee Farmers Cooperative Union (OCFCU)

● Sidama Coffee Farmers Cooperative Union (SCFCU)

● Yirgacheffe Coffee Farmers Cooperative Union (YCFCU)

● Kafa Forest Coffee Farmers Cooperative Union (KFCFCU)

● Bench Maji Coffee Farmers Cooperative Union (BMCFCU)

● Tepi Coffee Farmers Cooperative Union (TCFCU)

The benefit of cooperative unions is that they unite scattered small farmers and cooperatives into a large collective able to participate in international projects such as Firetrade and to provide a unified export channel for contacting foreign buyers. A certain percentage of harvest income is paid to the cooperatives, which deduct management fees, retain a portion for community development, and pay the remainder to small farmers. Small farmers can thus obtain income more stably and conveniently to cover planting and living expenses, which is why more and more small farmers are willing to join cooperatives.

Selected Coffee Cooperatives

Sigiga Cooperative (1600-2500m)
Production Area: Gedeo-Kochere
Members: 1,862
Soil Type: Red-brown soil
Certifications: Fair Trade, UTZ Sustainable Farming, Organic

Finchewan Cooperative (1450-2000m)
Production Area: Gedeo-Wenago
Members: 1,271
Soil Type: Red-brown soil
Certifications: Fair Trade, Organic

Konga Cooperative (1750-2300m)
Production Area: Gedeo-Yirgacheffe
Members: 1,556
Soil Type: Red-brown soil
Certifications: Fair Trade, Organic

Hafursa Cooperative (1750-2300m)
Production Area: Gedeo-Yirgacheffe
Members: 1,975
Soil Type: Red-brown soil
Annual Green Bean Production: 798,000 kg
Average Farm Size: Maximum 4 hectares, approximately 600 kg per hectare annually
Has washing station
Certifications: Fair Trade, Organic

Resa Cooperative (1000-1400m)
Production Area: Gedeo-Wenago
Members: 2,719
Soil Type: Red-brown soil
Can provide two sets of coffee processing equipment
Certifications: Fair Trade, Organic

Addis Katema Cooperative (1000-1400m)
Production Area: Gedeo-Wenago
Members: 891
Has washing station
Soil Type: Red-brown soil
Certifications: Fair Trade, Organic

Biloya Cooperative (1600-2500m)
Production Area: Gedeo-Kochere
Members: 1,203
Soil Type: Red-brown soil
Provides two sets of coffee processing equipment
Certifications: Fair Trade, Organic

Worka Cooperative (1650-2700m)
Production Area: Gedeb
Members: 305
Soil Type: Red-brown soil
Annual Green Bean Production: 457,000 kg
Average Farm Size: Maximum 4 hectares, approximately 699 kg per hectare annually
Has all processing equipment
Certifications: Fair Trade, Organic

Koke Cooperative (1750-2300m)
Production Area: Gedeo-Yirgacheffe
Members: 828
Soil Type: Red-brown soil
Can provide one set of processing equipment
Certifications: Fair Trade, UTZ Sustainable Farming, Organic

Hama Cooperative (1600-2500m)
Production Area: Gedeo-Kochere
Members: 1,505
Soil Type: Red-brown soil
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Chichu Cooperative (1410-2000m)
Production Area: Gedeo-Dila
Members: 1,675
Soil Type: Red-brown soil
Average Farm Size: Maximum 4 hectares, approximately 591 kg per hectare annually
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Michile Cooperative (1410-2000m)
Production Area: Gedeo-Dila
Members: 1,206
Soil Type: Red-brown soil
Average Farm Size: Approximately 592 kg per hectare annually
Can provide one set of processing equipment
Certifications: Fair Trade, UTZ Sustainable Farming, Organic

Hase Haro Cooperative (1450-2000m)
Production Area: Gedeo-Wenago
Members: 1,519
Soil Type: Red-brown soil
Average Farm Size: Maximum 4 hectares, approximately 591 kg per hectare annually
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Dumerso Cooperative (1750-2300m)
Production Area: Gedeo-Yirgacheffe
Members: 246
Soil Type: Red-brown soil
Can provide two sets of processing equipment
Certifications: Fair Trade, Organic

Tumticha Cooperative (1410-2000m)
Production Area: Gedeo-Yirgacheffe
Members: 960
Soil Type: Red-brown soil
Can provide two sets of processing equipment
Certifications: Fair Trade, Organic

Aramo Cooperative (1750-2300m) (90+ Qianbi production area)
Production Area: Gedeo-Yirgacheffe
Members: 2,254
Soil Type: Red-brown soil
Can provide two sets of processing equipment
Certifications: Fair Trade, Organic

Edido Cooperative (1750-2300m)
Production Area: Gedeo-Yirgacheffe
Members: 1,044
Soil Type: Red-brown soil
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Adame Cooperative (1000-1400m)
Production Area: Gedeo-Wenago
Members: 533
Soil Type: Red-brown soil
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Belekara Cooperative (1000-1400m)
Production Area: Gedeo-Wenago
Members: 685
Soil Type: Red-brown soil
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Adado Cooperative (1200-1700m)
Production Area: Sidamo-Bule
Members: 1,128
Soil Type: Red-brown soil
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Haru Cooperative (1200-1700m)
Production Area: Gedeo-Yirgacheffe
Members: 1,187
Soil Type: Red-brown soil
Can provide one set of processing equipment
Certifications: Fair Trade, Organic

Ethiopia's New Coffee Trade Regulations

In July 2017, two new coffee trade regulations may change this situation. Coffee farmers now have the right to choose to sell their coffee to processing plants within 3 days before the beans arrive at ECX warehouses.

Ethiopia Single Farm Coffee

The single-farm system has actually existed in Ethiopia for a long time, but its proportion has remained low, and traditionally it belonged to large commercial batches that did not emphasize quality. With Ethiopia's emergence in the third wave of specialty coffee over the past two to three decades, beyond traditional coffee practitioners, the country has gradually seen a group of innovators influenced by Western culture who hope to bring change to the industry. In addition to traditional exporters investing in production areas, this has also attracted a wave of people returning from Europe and America to invest in their hometowns.

How important is the single-farm system (which we will temporarily call the Single Farm Project, or SFP)? We all know Ethiopia is dominated by small-farm systems, but small-farm systems cannot achieve complete traceability.

Single farms are the only answer to all these problems: single-variety batches, special-processing-method batches, customized batches, and other concepts that are very important in practice for specialty coffee development.

For example, the Sidamo natural-processed "Hana Kuo" coffee bean belongs to a single farm, the micro-region Hambella Estate.

Ethiopia Hambella Benti Nenqua G1

Country: Ethiopia
Region: Oromia Region
Zone: Guji Zone
Woreda: Hambella Woreda
Kebele: Benti Nenqua Kebele
Altitude: 2,150 meters (processing plant GPS-measured height)
Variety: Ethiopian Heirloom
Annual Rainfall: Approximately 1,500 - 2,000 mm
Processing Plant: Hambella

Ethiopia Coffee Bean Brand Recommendations

FrontStreet Coffee's roasted Ethiopian beans come with full guarantees in both brand and quality, and their value is exceptional. Related recommendations: introductions and flavor descriptions of several characteristic varieties from the Ethiopian YCFCU cooperative.

FrontStreet Coffee Recommendation

To put this trading system into a cup, start with FrontStreet's washed Yirgacheffe, the classic entry point to Ethiopia's specialty coffee. It offers a clear jasmine floral note and bright citrus acidity, the profile people mean by "Yirgacheffe": a southern highland town where spring-like weather, drifting mist, and cool humidity let thousands of coffee trees thrive, producing a light, elegant, tea-like cup that drinks like a clean, refreshing lemon tea.

Ethiopian coffee is grown mostly under a smallholder "garden" model, with each farmer delivering cherries to a village-level washing station, which is why cooperatives dominate. The Gudingding Cooperative sits in the Worka area at Yirgacheffe's southeastern edge. Originally part of the Worka cooperative under the Yirgacheffe union YCFCU, it was established independently in 2012 by about 300 member farmers as demand for traceability turned more and more "single-origin" plots up. Because Gudingding pulps its fruit before drying, the coffee's intrinsic aroma comes through with unusual clarity: citrus and lemon tonality beneath an elegant white floral, bright and finely structured.

For a natural-processed counterpoint, FrontStreet's Flower Queen comes from the Hambella area of Guji. The farm covers 200 hectares and uses traditional natural processing: to prevent mold and off-flavors, workers dry the ripe cherries on raised beds for 21 days, turning them constantly for even drying, hand-sorting out defective and moldy beans every three to five days, then hulling once the skins have dried hard. Roasted medium-light, it shows a gentle fermented wine aroma, florals, citrus, and mango, with a more complex body, honeyed sweetness, a cocoa note with a touch of spice, a thick texture, and a long finish.