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Eroded Coffee Traceability and Its Impact on Export Coffee Prices for Ethiopia

Author

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  • Leonard Leung

    (Department of Economics, Queen’s University, Canada)

Abstract

In December 2008, the Ethiopian Commodity Exchange (ECX) opened a new coffee platform that has transformed Ethiopia’s coffee trade. The way ECX handles coffee in a commodity fashion has eroded traceability, a characteristic sought after by overseas coffee buyers. This paper traces the forces that give rise to the commoditization of coffee. An empirical analysis using a dataset on export coffee transactions supports the view that eroded traceability suppresses the export price of non-traceable, ECX-sourced coffee, relative to fully traceable coffee. The cumulative monetary is estimated to be 280 million USD, equivalent to 26% of farmer’ farm gate income from coffee.

Suggested Citation

  • Leonard Leung, 2014. "Eroded Coffee Traceability and Its Impact on Export Coffee Prices for Ethiopia," Development Discussion Papers 2014-04, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:249
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    References listed on IDEAS

    as
    1. David Boansi & Christian Crentsil, 2013. "Competitiveness and Determinants of Coffee Exports Producer Price and Production for Ethiopia," Journal of Advanced Research in Economics and International Business, ASERS Publishing, vol. 1(1), pages 31-45.
    2. Aslihan Arslan & Christopher P. Reicher, 2011. "The Effects of the Coffee Trademarking Initiative and Starbucks Publicity on Export Prices of Ethiopian Coffee," Journal of African Economies, Centre for the Study of African Economies, vol. 20(5), pages 704-736, November.
    3. David BOANSI & Christian CRENTSIL, 2013. "Competitiveness and Determinants of Coffee Exports, Producer Price and Production for Ethiopia," Journal of Advanced Research in Economics and International Business, ASERS Publishing, vol. 1(1), pages 31-56, August.
    4. AfDB AfDB, . "Annual Report 2012," Annual Report, African Development Bank, number 461.
    5. Worako, Tadesse Kumma & van Schalkwyk, Herman D. & Alemu, Zerihun Gudeta & Ayele, Gezahegn, 2008. "Producer price and price transmission in a deregulated Ethiopian coffee market," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(4), pages 1-22, December.
    6. Arslan, Aslıhan & Reicher, Christopher Phillip, 2010. "The effects of the Coffee Trademarking Initiative and Starbucks publicity on export prices of Ethiopian coffee," Kiel Working Papers 1606, Kiel Institute for the World Economy (IfW Kiel).
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    Cited by:

    1. Ludovic Mbakop & Glenn P. Jenkins & Leonard Leung & Kamil Sertoglu, 2023. "Traceability, Value, and Trust in the Coffee Market: A Natural Experiment in Ethiopia," Agriculture, MDPI, vol. 13(2), pages 1-15, February.
    2. Gelaw, F., 2018. "Impacts of Trademarking on Export and Producer Prices in Ethiopian Coffee," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277290, International Association of Agricultural Economists.
    3. Tröster, Bernhard, 2015. "Global commodity chains, financial markets, and local market structures: Price risks in the coffee sector in Ethiopia," Working Papers 56, Austrian Foundation for Development Research (ÖFSE).

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    More about this item

    Keywords

    Ethiopian Commodity Exchange; Ethiopian coffee; coffee traceability; commoditization;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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