A new way of doing business. In the land where Arabica coffee has been cultivated indigenously for longer than anywhere in the world, the very large majority of the finest Ethiopian coffees is produced by very small farmers, mostly unaware of the market premium their coffees deserve. Because these farmers lack the means and knowledge to directly access the international market, they are not likely to gain from the value potential of their coffee, and thus transform their livelihoods and sustainably grow out of poverty. At the same time, as the specialty coffee segment grows rapidly, more discerning consumers increasingly demand not only quality in the cup, but traceability of the coffee to the grower, to the geographic origin, or to the environmental or socio-economic attributes that the coffee may possess. The Ethiopia Commodity Exchange (ECX), established in 2008 to bring order, efficiency, transparency, and integrity to Ethiopia’s agricultural markets, is proud to announce an innovative approach to closing the real gap between producers of very special coffees and buyers interested in tracing these coffees to their origin: Direct Specialty Trade (DST). DST combines the advantages of the organized marketplace with full traceability to the producer and geographic origin and any attributes or certifications that raise the market value. DST guarantees that the producer receives 85% of the FOB sale price.

The DST approach relies on:

• Quality certification of coffees produced by primary cooperatives, cooperative unions, or commercial growers, using the ECX Specialty Q Arrival grading system;
• Identity-preserved inventory management of these coffees;
• Price discovery through a monthly DST bidding session between qualified growers and pre-registered international buyers, on a lot by lot basis;
• Engagement of export service providers responsible for export preparation and exporting services on behalf of the grower; and,
• Market data dissemination of prices and volumes and contract performance to provide transparency to all.

DST heralds a new era for Ethiopian specialty coffee. DST is about empowerment and sustainability, based on transparency, partnership, and reliability.  DST combines traceability to the smallest unit of production, the Ethiopian smallholder coffee farmer, to the big business of the global supply chain where reliability and quality and certification are the key drivers.  DST offers a win-win-win in three dimensions:  a win for farmers who can reach the marketplace directly, a win for buyers who seek sustainable ways to source high-quality supply, and a win for the market, where integrity of the product and the transaction is maintained.

The first DST bidding session will take place February 17, 2010 in Addis Ababa.  A catalog of coffees available for sale shall be posted on the ECX website on January 28, 2010 along with an order form to request samples on a purchased basis (USD 10 per 250 grams, reimbursable to the producer).