December 24, 2008
Ethiopia launches formal Coffee Exchange
Allan Odhiambo
A rude awakening may be in the offing for the local coffee industry as regional rival Ethiopia refines its game with the launch of a formal trade platform for the commodity.
Though credited for high quality produce that has attracted global giants such as Starbucks, Ethiopia has never had an official coffee exchange and instead relied on informal sales systems through middlemen whose dirty machinations often left farmers disgruntled amid claims exploitation.
Last month’s inauguration of an electronic coffee sale platform on the Ethiopia Coffee Exchange is however certain to catapult the country’s coffee industry to greater heights, leaving rivals such as Kenya with no option but to shape-up or lose out.
With an organised sales system and high quality produce, the expectation is that the Ethiopian coffee industry will attract more buyers and help firm its earnings.
Leading roasters
Leading roasters of the commodity are known to shun informal systems because their strict procurement policies don’t provide headroom for loose arrangements that highly hinged on uncertainty.
Kenya runs a weekly auction of the commodity at the Nairobi Coffee Exchange (NCE) but has recently struggled to break even amid hitches in production caused by among other things outbreaks of coffee berry disease and Coffee Leaf Rust.
At the peak of a production crisis that forced the NCE into an early closure early this year, several international dealers turned their eyes on Ethiopia, effectively sounding a warning to rival’s such as Kenya.
“I don’t think the Ethiopian coffee exchange will have an immediate impact on us but we shall look out for anything,” Daniel Mbithi, an official at the NCE told Business Daily.
Apart from the sale platform, Kenya finds itself in another tight-spot with regard to the sale of patented brands that fetched premium earnings in the market. According to WTO, product patents bestow exclusive rights on making, using, offering for sale, selling and importation.
