LONDON – The Executive Director of the ICO, Mr Roberio Oliveira Silva, was invited to speak at the 2nd International Ethiopian Coffee Conference which takes place in Addis Ababa on 4 and 5 November 2013, organized by the Ethiopian Coffee Exporters Association.
The theme of the conference was ‘Building a sustainable coffee future’.
The Conference was opened by the President of the Republic of Ethiopia, H.E. Dr Mulatu Teshome and attended by dignitaries including H.E. Mr Yacob Yala, State Minister of Trade. During his visit, the Executive Director had a meeting with the President to discuss coffee issues.
The following is the full text of the speech delivered by Mr Silva at the Conference.
Ladies and Gentlemen,
It gives me immense pleasure to be here in the birthplace of coffee and I would like to take this opportunity to thank the Government of Ethiopia for its generous offer to host the next ICO World Coffee Conference 2015. A decision on this matter is expected to be taken at the next International Coffee Council Session in March 2014.
It also gives me great pleasure to pay tribute to my old friend, Mr. Arega Worku, the longest serving African delegate to the ICO, Chairman of IACO for over 20 years. Arega is still carrying on serving the coffee industry as Senior Advisor of MIDROC Ethiopia.
Roberio Oliveira Silva
I would like to congratulate the Ethiopian Coffee Exporters Association who has put together this wonderful Conference. The Association was first established in 1969 by about a dozen members with the prime objective of encouraging the production of quality coffee; promoting coffee export globally; and resolving problems encountered collectively.
Nowadays, the ECEA represents over 80% of Ethiopia’s coffee exporters who make up over 96% market share of the Ethiopian coffee export. As a trade association which has been in the business for over four decades, it is the authentic coffee industry leader vested with the prime responsibility of promoting the Ethiopian coffee in the global market.
Now, let us begin by taking a quick look at the market, where we can see a sustained downward trend in coffee prices for nearly two and a half years now, without it being obvious at what point prices will stabilise.
The monthly average of the ICO composite indicator fell by 7.5% in October to its lowest level since April 2009, and these decreases have been felt across all price groups, with the strongest drop last month observed in Robustas, hitting a 3 year low.
This is a worrying situation, as we are quickly reaching, or indeed have already reached, the point where the market price of coffee does not even cover the cost of production for many producers. This will have serious consequences not just for farmers, but also for the industry as a whole, as both the quantity and quality of supply will suffer once the current surplus comes to an end.
Total production in 2012/13 is around 145 million bags. In terms of consumption, growth in traditional importing countries has slowed to around 1%, however, demand in exporting countries and emerging markets is accelerating at 3‐5% per year, and it is in these countries, particularly in the soluble market, where we see the most dynamic potential for coffee consumption.
So what we see, is a market characterised by a surplus that most likely will prevail into 2014/15, but at the same time, a healthy growth in demand that requires over 4 million bags a year of additional coffee available to consumers.
In view of this challenging situation, the ICO is more than ever fully committed to its goal towards a sustainable coffee sector. Operating as we do in a free market economy, market transparency is of vital importance for growers, traders and roasters alike, issues such as price volatility and economic uncertainty remain a crucial aspect of the ICO work plan.
Focusing on risk management and economic sustainability has been at the forefront of the ICO’s activities and will remain so. In this respect, we will endeavour to continue with our daily, monthly and quarterly monitoring of prices and statistical data to provide accurate and useful information to the market.
