18/01/2026
How the question should be seen
The participant raised a legitimate market and policy question, not a criticism. Ethiopia is the birthplace of coffee and a major producer, yet its domestic coffee prices often move independently of the international (ICE / C-market) price, sometimes even in the opposite direction. Asking why reflects genuine concern about market transparency, competitiveness, and sustainability.
Why the question makes sense
1. Coffee is globally traded, but locally structured
While coffee is the second most traded commodity globally, Ethiopia’s coffee sector has unique characteristics smallholder dominance, quality differentiation, and strong domestic consumption which can weaken direct linkage to international prices.
2. Supply demand imbalance at home
Strong local demand, limited exportable supply, hoarding, and competition between exporters and local buyers can push local prices upward even when global prices fall.
3. Quality vs. commodity pricing
Ethiopian coffee is often sold as specialty or origin coffee, where premiums are applied. These premiums may rise despite a falling commodity market.
4. Market structure and regulation
Government policies, ECX mechanisms, foreign-currency pressures, and regulatory interventions can disconnect domestic prices from international benchmarks.
5. Farmer protection vs. exporter pressure
Higher local prices may protect farmers in the short term but create challenges for exporters trying to compete internationally.
How to interpret the intent of the question
The question reflects:
• Concern for export competitiveness
• Desire for price predictability and transparency
• Interest in aligning Ethiopia with global market practices
• Recognition of coffee as a strategic national asset
Overall this was a constructive, policy level question that encourages deeper discussion on:
• Price formation mechanisms
• Balance between farmer welfare and export competitiveness
• Ethiopia’s positioning between commodity coffee and specialty markets
It’s the kind of question that helps move the sector forward not confrontational, but essential.