Coffee in Ethiopia has been traded on the Ethiopia Commodity Exchange since 2008. The ECX was established to create an element of collective bargaining for farmers who are not members of cooperatives or owning large estates. Previously, only a third of all the agricultural products produced in Ethiopia reached the market due to the high costs and risks involved with trading. There was no assurance of product quality or quantity which meant buyers would only trade with suppliers they knew and trusted. This resulted in many of Ethiopia’s agricultural producers becoming isolated from the market, forcing them to sell their produce to the nearest buyer, sometimes a chain of multiple middlemen, and leaving them unable to negotiate on price or improve their market position.
With the introduction of the ECX, coffee exports in Ethiopia have become more regulated and centralized, enabling more smallholder producers to have access to the global market. Ninety percent of all the coffee produced in Ethiopia now moves through the ECX where it is cupped and graded according to the flavour profile and quality. Since its inception in 2008, the ECX claims to have introduced:
- Market integrity - by guaranteeing the product grade and quantity and operating a system of daily clearing and settling of contracts.
- Market efficiency - by operating a trading system where buyers and sellers can coordinate in a seamless way on the basis of standardized contracts.
- Market transparency - by disseminating market information in real time to all market players.
Yirgacheﬀe is both a town and grade of coﬀee in Ethiopia. The town itself is located in the Gedeo zone in the Southern Nations and Nationalities Peoples Regional State (SNNPRS) in Southern Ethiopia. More than any other country, Ethiopia has a broad genetic diversity among its coﬀee varieties, with each type having distinctive taste, shape and colour. As a result, each region in the country can oﬀer a diﬀerent ﬂavour proﬁle, forming the grading system for Ethiopian coﬀees e.g. Sidamo, Harrar, Limu, Djimmah etc. It is widely argued that a Yirgacheﬀe grade coﬀee can oﬀer one of the most distinctive ﬂavour proﬁles in the world with pungent ﬂoral aroma and intense citrus ﬂavour.
Processing in Yirgacheﬀe can take the form of both washed and natural, with most of the coﬀee growing at over 2000 metres above sea level. Much of the coﬀee grown in Ethiopia is done using traditional methods, under shade trees alongside other crops and without the use of chemicals. Coﬀee from Yirgacheﬀe is often referred to as ‘garden coﬀee’ as it is grown on very small plots, often in the backyard of small dwellings.