As received from Dr Eleni GabreMadhin, Chief Executive Officer, Ethiopian Commodity Exchange
September 7, 2011
To the Editor (Bloomberg/Business Week)
Dear Sir- For those following coffee trading in the Ethiopia Commodity Exchange (ECX), the September 1 article “Starbucks Rivals Avoid Ethiopian Coffee as Beans Lose Cachet” brings a rather odd sense of déjà vu. Why odd is that the article essentially ignores over two years of close engagement between ECX and US-based specialty coffee buyers. In a highly successful partnership with the premier industry group, the Specialty Coffee Association of North America (SCAA), ECX has developed a system like no other commodity exchange in the world, distinguishing coffee by quality and origin and trading 326 unique coffee contracts, described by the SCAA on its website in October 2009 as “likely the most sophisticated specialty coffee discovery system in the world.” A step further, ECX launched a Direct Specialty Trade auction in 2010 attracting participation from a wide range of specialty coffee roasters, including Stumptown, Intelligentsia, and Royal Coffee, among others, who purchased 100% traceable premium beans directly from Ethiopia’s coffee cooperatives and growers, and have continued to do so. The article further neglects the provision in the cited 2008 coffee legislation that “any coffee producer shall have the right to directly export from his own farm” (Art. 11(1)), embodying our national commitment to enabling traceability to the very plot if so desired.
Far from fearing that Ethiopia’s international coffee buyers would be “screaming,” as misstated in your article, indeed, Ethiopia has posted a record volume of coffee exports in 2010-2011, with a whopping US$879 million in coffee exports, three times the combined volume exported by Kenya, Tanzania, and Rwanda. Ethiopia’s share in the global market is rising, not falling. And single-origin, fully traceable coffee is alive and well in our market. ECX provides transparency in pricing and quality and is empowering our small farmers to increase their share of the final export price from a meager 30% to above 70% in recent years while the volume of specialty grade coffee coming to market has tripled. Bringing value back to producers is ultimately what transforms lives, develops our coffee sector, and grows our economy. Odd then that what the noise may really be about is not the lack of traceability after all, but rather the fact that transparency means playing by the rules of a game that makes sure that everyone gets their fair share, including millions of Ethiopian small-scale coffee farmers. Perhaps your esteemed publication can provide a more balanced and fact-based perspective in the future.
Eleni Z. Gabre-Madhin
Chief Executive Officer
Ethiopia Commodity Exchange