Auction market in the coffee oscar reinforcing small holders

Glory for the Brazilians, years before they took the initiative to protest to sell their coffee in stock market decided in the wall street of New York.

Because, Brazilians have full of pride for their coffee and do not consider it as commodity product. When they realize that the stoke price was not fair, they have devised a new scheme called Cup of Excellence seldom called Oscar of the Coffee World or Coffee Olympic.

Such prestigious coffee competition apart from benefitting small holders and reducing brokers, it promotes traceability of coffee and help countries like Ethiopia to advance the export trade.

Hence, Ethiopia has hosted the Cup for the third time. The contest first came to its birth place with the aid of USAID Feed the Future Ethiopia Value Chain Activity in collaboration with the Ethiopian Coffee and Tea Authority and Coffee Exporters Association.

Basing in the United States of America, a firm called Alliance for Coffee Excellence Facilitates the biyearly competition where companies bid to purchase specialty coffee from small holders at a staggering price.

The third coffee quality competition has already begun on Monday. The Coffee of Excellence has been started with collecting samples stating from Monday, February 30, 2014, according to the Coffee and Tea Authority. Speaking to the Ethiopian Press Agency, Ahmed Shemsu, Director General’s Chief of Staff of the Authority and a member of the Coffee Quality Competition, said that the 3rd Coffee Quality Competition, which is led by the International Alliance for Coffee Excellence (ACE) and is being run by the National Coffee and Tea Authority has started collecting samples in warehouses of Addis Ababa on Hawassa, Dire Dawa and Jimma. According to Ahmed, only smallholder farmers that own up to 20 hectares of land can participate in this year’s coffee quality competition.

He said standard warehouses have been set up in Hawassa, Jimma, Dire Dawa and Addis Ababa. In doing so, 150 and 40 coffee samples will be floated to auction market in the first and the second round of the competition respectively.

He further said that beyond the competition and the award, the cup of excellence has paved the way for the discovery of more and more coffee varieties in Ethiopia.

According to Ahmed, the winners of the preceding two coffee quality contests have benefited small holders and promoted the country recalling that in the first competition there was an achievement to collect 1500 coffee samples and a kilo of Ethiopian coffee was sold at 407 USD while a kilo was sold 350 USD in the second contest.

Winners of the Ethiopian Coffee Samples in both competitions were awarded the Presidential Award.

The Coffee Quality Sampling Conference in Ethiopia will conclude on March 2, 2014, according to the Alliance for Capacity, a global initiative leading the program. He said standard warehouses have been set up in Hawassa, Jimma, Dire Dawa and Addis Ababa.

He added that the cup of excellence is creating more and more unknown coffee varieties in Ethiopia beyond the competition.

According to Ahmed, the winners of the previous two coffee quality contests have benefited from the coffee. The top scoring coffee in the year’s Cup of Excellence sold at a staggering price of USD 185.10 (ETB 6,293) per pound, or USD 407 (ETB 13,838) per kilogram to Maruyama Coffee Co. Ltd from Japan.

This is the highest price ever recorded for Ethiopian coffee. In the first cup, Coffee from Nigusie Gemeda of Sidama, SNNPR received the highest price. The US company coffee at Intelligentsia bought the second highest coffee that belongs to Rumudamo Coffee PLC from Sidama at USD 108 (ETB 3672) per pound.

The third highest price went to Testi Trading PLC at USD 66.60 (ETB 2264) per pound sold to black Gold Coffee CO. Ltd from Taiwan Seble Tewoldebirhan Public Relations Manager at USAID’s Feed the Future Ethiopia Value Chain Activity told The that the Cup of Excellence has been well accomplished though the world has been struck by a global pandemic COVID-19.

Some part of Specialty Coffee Competition aimed at benefiting smallholders has got its end in the United States due to the risk of COVID-19 though it was scheduled to be fully held in Addis Ababa.

The Ethiopian Coffee Tea Authority and Alliance for Coffee Excellence with USAID’s Feed the Future Ethiopia Value Chain Activity support brought the renowned coffee competition Cup of Excellence for the first time to Ethiopia in 2020.

According to documents, for every kilogram of coffee beans an Ethiopian farmer sells for about 3 USD, it is estimated that people up in the supply chain make around 200 USD.

There are millions of farmers who produce thousands of tons of coffee in Ethiopia, the fifth-largest producer in the world after Brazil, Vietnam, Columbia and Indonesia. Recently, various activities are being undertaken to promote Ethiopia’s coffee to the international market and thereby boost its presence in the international coffee market.

The Ethiopian Government is planning to construct a USD 50 million coffee park in partnership with the Korean government. The park, which will sit on 30 hectares of land in Ethiopia’s capital Addis Ababa, will play a huge role in promoting the country’s local coffee products at the global market. It will have a coffee museum; a coffee market center among many other facilities, the project will be completed in three years.

Around 95 percent of the Ethiopian coffee is produced by smallholder farmers who work in their own farms and sell their produce to middlemen.

These intermediaries are widely suspected of short changing them on the huge profit margins. The multi-million dollar coffee business constitutes substantial percent of Ethiopia’s foreign exchange. However the performance of Ethiopia’s export trade and the beneficiary of growers have been tempted under various circumstances. Elicit trade, contraband along with the failure of well promoting the product are posing potential challenges.

Even though Ethiopia has improved practices and made important progress all along its coffee value chain, its coffee farmers lag behind. Improved coffee plant varieties remain out of reach for too many farmers, the adoption of better processing techniques has been slow, and the rising potential for disease and weather shocks due to climate change is leaving farmers increasingly vulnerable.

Yet despite its leading position in Africa and the positive changes made in the coffee trade in the last decade, the Ethiopian coffee sector is underperforming, according to recent research by IFPRI, the Ethiopian Development Research Institute (EDRI), and Bonn University’s Institute for Food and Resource Economics. Ethiopian yields are slightly higher than those of Kenya and Rwanda, but lower than Uganda’s— and only one half to one third the sizes of major Latin American producers’.

Ethiopian farmers, meanwhile, receive a smaller share of export prices compared to most other countries. How to address these problems? A sustained combination of efforts can help.

Increased access to and adoption of improved tree varieties, as well as other improved practices, would help to raise yields and to mitigate widespread disease issues.

Better access to alternative savings options might lead to higher adoption of washed coffee practices, which could generate higher export earnings.

Finally, a trading sector that allowed international incentives to reach the local producer, as well as traceability to individual producers that are currently anonymous because of the market centers’ institutional opacity, might improve the perception among farmers that increased quality offers substantial financial rewards.


The   4 March  2022

Leave a Reply