Coffee Gains Spur Investment, Ethiopia Exchange Chief Says

Surging coffee prices are prompting more farmers in Ethiopia, the world’s sixth-biggest producer, to cultivate the crop and invest in higher yields, the executive director of the Ethiopia Commodity Exchange said.
“Anytime the price goes up like this, it’s a windfall gain, but people really start thinking of longer-term investments,” said Eleni Gabre-Madhin today in an interview in her office in Addis Ababa. Ethiopia’s growers, most of whom farm small plots, currently have yields that are about a fourth of what they could be with improved fertilizers and cultivation practices, she said.
Arabica coffee surged 77 percent in the past year, through yesterday, reaching a 13-year high of $2.445 a pound on Jan. 12, because of lower production in Brazil, the world’s top grower. The March contract fell 0.4 percent to $2.365 at 10:13 a.m. today on ICE Futures U.S. in New York.
Ethiopia is the 10th-largest coffee exporter, according to the United Nations’ Food and Agriculture Organization. The country grows mostly arabica beans, which are brewed in specialty coffee houses including those run by Starbucks Corp.
To contact the reporter on this story: Alan Bjerga in Addis Ababa at abjerga@bloomberg.net.
To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net.