Arabica coffee futures experienced a significant drop on Tuesday, falling 2.66 percent, as broader equity market sell-offs reverberated through commodity markets.

The decline in global coffee prices comes at a critical time, as increased U.S. tariffs spark concerns among exporters that rising costs could further discourage trade or drive up global coffee prices.

The price fall, compounded by global trade disruptions and the spectre of potential U.S. tariffs, casts a shadow over coffee exporters, particularly in nations like Ethiopia, where coffee constitutes a vital economic lifeline.

On Tuesday, May arabica coffee futures (KCK25) shed 10.00 points, a decline of 2.66 percent, while trading in May ICE robusta coffee (RMK25) remained suspended due to the Easter Monday holiday closure of London markets.

The downturn in arabica prices aligns with a wider sell-off in equity markets, highlighting coffee’s vulnerability to macroeconomic turbulence. Just last week, arabica prices had climbed to a two-week high on Thursday, with robusta peaking at a three-week high the previous day.

However, this momentum reversed sharply, with ICE-monitored arabica inventories swelling to a one-month high of 795,588 bags last Thursday, and robusta stocks hitting a one-week peak of 4,272 lots. This buildup suggests a potential oversupply, adding downward pressure on prices.

For Ethiopia, a leading arabica producer, the stakes are particularly high. Coffee exports reached 1.5 billion US dollars by the end of the last quarter, fueled by elevated arabica prices—a boon for an economy where coffee accounts for a significant share of foreign exchange earnings.

Yet, Tuesday’s price drop threatens to unravel these gains. A prolonged slump could erode export revenues, straining Ethiopia’s trade balance and economic resilience.

Compounding the challenge are global trade headwinds, including the looming possibility of U.S. tariffs on coffee imports. Such measures could inflate costs for American consumers, dampen demand, and further compress margins for exporters.

Exporters like Ethiopia are particularly vulnerable to price fluctuations due to their reliance on coffee as a primary export. The recent drop, if sustained, could significantly impact their revenue streams.

Elsewhere, production and export data paint a mixed picture. In Brazil, the world’s coffee powerhouse, Minas Gerais—a key growing region—received 17.9 mm of rain in the week ended April 12, equivalent to 89 percent of the historical average, per Somar Meteorologia.

While this rainfall offers some relief, it falls short of assuaging concerns about future yields. Brazil’s crop agency, Conab, forecasts the 2025/26 coffee harvest at 51.81 million bags, down 4.4 percent year-on-year, and has trimmed its 2024 estimate to 54.2 million bags from 54.8 million.

March green coffee exports from Brazil slumped 26 percent year-on-year to 2.95 million bags, according to Cecafe, signaling logistical or demand-side pressures. Yet, Brazil’s full-year 2024 exports surged 28.8 percent to 50.5 million bags, per Conab, bucking a broader global trend.

Vietnam, a robusta heavyweight, saw January-March exports fall 15.3 percent year-on-year to 495,780 metric tons, per the Vietnam Customs Department. Globally, coffee exports from October to December 2024 dipped 0.8 percent to 32.25 million bags, according to the International Coffee Organization.

Looking ahead, the USDA projects 2024/25 global coffee production to rise 4 percent to 174.855 million bags, with arabica up 1.5 percent to 97.845 million bags and robusta up 7.5 percent to 77.01 million bags.

Despite this uptick, ending stocks are expected to shrink 6.6 percent to 20.867 million bags—a potential buffer against further price declines if demand holds firm.

(BirrMetrics)

Kenya set to surpass Ethiopia as East Africa’s largest economy in 2025 – IMF

Kenya is on track to become East Africa’s largest economy by 2025, overtaking regional rival Ethiopia, according to the latest projections from the International Monetary Fund (IMF).

The IMF estimates Kenya’s gross domestic product (GDP) will reach $132 billion, surpassing Ethiopia’s projected $117 billion. The shift marks a significant change in the regional economic hierarchy, driven by contrasting policy choices and macroeconomic conditions in both countries.

Ethiopia’s recent move to devalue its currency, the birr, by more than 55% in 2024 helped the country unlock $3.4 billion in IMF support and $16.6 billion in World Bank funding, aiding efforts to restructure debt and stabilize its economy. However, the decision has led to a surge in inflation and import costs, placing additional strain on a country already grappling with the effects of internal conflict and climate disruptions.

In contrast, Kenya has demonstrated relative macroeconomic resilience. The Kenyan shilling appreciated by 21% in 2024, becoming the world’s best-performing currency, according to market analysts. The surge was supported by a successful $1.5 billion Eurobond issuance, record-high diaspora remittances totaling $4.94 billion, and robust growth in agricultural and manufacturing exports.

Despite strong fundamentals, Kenya has faced its share of domestic turbulence. The government’s controversial Finance Bill 2024, which introduced sweeping tax changes, sparked widespread public protests and led to significant investor losses. In response to the unrest, the government withdrew from a $3.6 billion, four-year IMF program, raising concerns over policy continuity.

Even so, Kenya’s economy remains relatively stable, thanks to its diversified structure and improved investor confidence. The country is weathering the global economic slowdown better than many of its regional peers, despite the IMF forecasting a dip in global growth from 3.3% in 2023 to 2.8% in 2024.

Ethiopia had long been seen as East Africa’s economic powerhouse, buoyed by its large population and ambitious infrastructure projects. But recent economic headwinds have exposed vulnerabilities in its development model. Meanwhile, Kenya’s open-market approach, diversified revenue streams, and currency stability have enhanced its regional position.

While both countries face ongoing economic uncertainty amid global trade tensions and inflationary pressures, Kenya appears better positioned in the near term.

If current trends hold, Kenya is set to officially become East Africa’s largest economy in 2025, marking a turning point in the regional economic landscape

(africanews)

ECA and AUC join forces to enhance economic opportunities for returnee migrant women

The Economic Commission for Africa (ECA) and the African Union Commission (AUC) have been working on the implementation of a transformative project titled “International Migration in Africa: Shaping a Positive Narrative and Removing Barriers to Mobility.” This initiative is dedicated to promoting the economic empowerment of returnee migrant women with a particular focus on domestic workers, in Ethiopia, Kenya, and Uganda.

Global migration patterns have evolved significantly since World War II, with over 1 billion individuals having migrated. Today, approximately 281 million are international migrants, and 750 million have moved domestically. These vast shifts in migration dynamics present both challenges and opportunities for both origin and destination countries. A key area of focus is the economic empowerment of migrant women, who often find themselves in informal and precarious employment scenarios, leading to vulnerability to exploitation and rights violations.

Recognizing these challenges, the ECA and AUC are fully committed to advancing economic opportunities for returnee migrant women. This initiative aims to strengthen their participation in diverse economic activities and facilitate their reintegration into local economies. In October 2024, a workshop was conducted at the ECA, presenting findings regarding the economic conditions of returnee migrants from the Gulf Cooperation Council (GCC) in Ethiopia. The workshop catalyzed a strategic dialogue among stakeholders, focusing on effective reintegration and sustainable support.

“We are witnessing an unprecedented era of migration, with over 1 billion individuals on the move globally, highlighting the urgent need to address the vulnerabilities faced by women migrants, particularly in the domestic work sector,” said Gonzaque André Rosalie, Economic Affairs Officer, speaking on behalf of Keiso Matashane-Marite, Chief of Gender Equality and Women Empowerment Section.

“As labor migration to the GCC remains prevalent, it’s crucial to support these women facing economic challenges upon return”, stated Keiso Matashane-Marite, Chief of Gender Equality and Women Empowerment Section, at the Economic Commission for Africa, in her opening remarks.

“Our joint project with yhe AfricanUnion aims to address challenges for returnee migrant women in Ethiopia, Kenya & Uganda. Following the October 2024 meeting in Ethiopia, an assessment report was finalized. A grant facility and capacity building activities will be launched soon”, she added.

“The goal of RRR is to improve the quality of support to people who choose to return and for it to be effective there has to be effective policies on Return, Readmission & Reintegration; enhanced engagement and collaboration’’, said Tapiwa Mucheri, on behalf of Sabelo Mbokazi, Head of Labour, Employment & Migration Division, at the African Union Commission.

A key outcome of the workshop held in October 2024 was the proposal to establish a dedicated working group which will provide strategic guidance and ensure the long-term sustainability of initiatives designed to empower returnee migrant women. By fostering multi-stakeholder collaboration, the working group will play an essential role in advancing the project’s objectives and improving the lives of countless women.

The Working Group Meeting seeks to offer strategic oversight for empowering returnee migrants from the GCC; ensure continuity and lasting impact of the project initiatives; drive policy advocacy for migration and reintegration policies and finally to enhance collaboration among stakeholders.

Participants at the Working Group Meeting include representatives from representatives from relevant government ministries, migration experts, civil society organizations, ENAT Bank, NGOs, returnee domestic workers as well as experts in labour, employment, migration, gender equality and women empowerment, economic empowerment from AUC, ILO and ECA.

(ECA)