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

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Ethiopia's Coffee Export Systems

According to Ethiopian regulations, there are three coffee export systems: (1) The largest system of private processing plants exported through ECX bidding; (2) The cooperative system; (3) The single farm system. Among these three systems, cooperatives and single estates can export directly without going through ECX bidding, which can be said to have completely reliable traceability/product history.

However, when tracing back to the source, cooperatives after all also purchase cherries collected by small farmers for centralized processing, which is not 100% traceable. Single farms are ultimately the only possibility for moving toward the next generation.

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). The founding purpose of ECX was to establish Ethiopia's and even 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, building an effective, reliable, and transparent commodity market.

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

ECX Coffee Trading Operation Model

ECX's trading operation model for coffee roughly works as follows: First, farmers sell coffee cherries to local washing stations. Some washing stations pay higher prices to purchase better quality coffee cherries. The washing stations send processed green beans to delivery station warehouses.

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

1. Better price protection - it purchases coffee beans from farmers at stable and relatively favorable prices, then stockpiles them;

2. Coffee grading - higher quality commands higher prices;

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

4. Establishment of warehouses & 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 based on quality and cupping results. Higher overall quality sells for higher prices. Traders purchase green beans through ECX, but packaging only indicates production area and village at most, 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 respective 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 uniting scattered small farmers and cooperatives into a large collective to participate in international projects, such as Firetrade, providing a unified export to contact foreign buyers. A certain percentage of harvest income is paid to cooperatives, which deduct management fees, retain a portion for community development, and pay the remainder to small farmers. Small farmers can obtain income more stably and conveniently to cope with 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 coffee 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 in the past two to three decades, besides traditional coffee practitioners, Ethiopia has gradually seen a group of innovators influenced by Western culture who hope to bring changes to this industry. In addition to traditional exporters investing in production areas, it 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'll temporarily call Single Farm Project, or SFP)? We all know that 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 very important practical concepts 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 coffee beans have full guarantees in both brand and quality. More importantly, the cost-performance ratio is extremely high - one half-pound (227g) package costs only about 90 yuan. Calculating at 15g of coffee powder per cup, one package can make 15 cups of coffee, costing only about 6 yuan per cup, which is a conscientious recommendation compared to coffee shops selling cups for over a hundred yuan.

Related recommendations: Introduction and flavor descriptions of several characteristic varieties from Ethiopia YCFCU cooperative

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