ECX / DST Auction

Today was an interesting day to be in Addis Ababa, and especially at the recently formed ECX (commodity exchange) as they conducted their very first Direct Specialty Trade (DST) today.  It was complete fluke that I happened to be there today, but I was nonetheless, and got to see the ECX in action.  Truth be told it wasn't very exciting, no auctioneer and with only a few buyers (all importers) in the pit, there was no spectacle.  The DST is in all honesty seemed to me to be a bit of a window dressing to the ECX, and today's auction probably didn't garner the results the ECX were looking for.  One of the problems with today's auction was the lack of perceived quality in terms of the lots available for purchase.  Many of the lots were sporting scores of 84 points or less, when combined with reserve bids of $3.00 US per pound, many did not even get a bid.  Those coffees that had some uniqueness to them sold for between $2.50 with the highest price paid of $4.02 US per pound (the average price was around $2.80, and the auction netted around $500k).  But as Jason Long from Cafe Imports told me, there wasn't enough time for co-ops or farmers to prepare select lots which could have resulted in an overall increase in quality.  So with the average quality combined with the logistical nightmare of moving 50 - 150 bags (less than a full container) it isn't worth the hassle of the premiums being sought today at the DST.  So while there is no doubt that today's auction was a step in the right direction, it was a far cry from a raging success.  I think that it has potential of offering would-be buyers with traceability, but if it is to work on a larger scale, the ECX might want to take a page out of the COE online auction, or the Esmeralda auction.  While it would likely be a huge challenge for the ECX to get samples distributed across the globe, it would allow roasters focused on quality to cup the coffees at home, and then either designate a proxy at the ECX to bid, or actually have the ability to bid online.  Getting the coffee home is another issue, but with importers like Cafe Imports already at the venue, I am sure that Jason and crew would be happy to consolidate a container or two for the right fee.  OK, enough rambling on my part for the day.  All in all, an interesting way to begin the trip.

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