I see the dollar continuing to squad. Right now the Ethiopia really does a lot of contracts with USD and I think it'd be wise for them to start to move away from that because if you have a these guys are fixing their contracts in the US dollars that's coming into the country as USD and then they're purchasing goods a lot of times from China and stuff but if the dollar sliding in China begins the value of the one it's going to just pump up inflation locally I think it's going to diversify what Ethiopia wants to hold on to really intimidating trading partners in the future. Do you ever feel like you're listening to the podcast and wishing you could step behind the scenes join the conversation and really connect with other coffee industry folks who share your values? That's exactly what our monthly Patreon live discussion group is all about.
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Welcome to the daily coffee probe by mapper forward friends I'm your host Lee Safar and this is episode five unfortunately of what is a spectacular five part series getting an insight into what has happened in Ethiopia. We folks I want to give you some insight into something usually when I record a podcast with somebody and we stop recording in between episodes there's usually a whole other podcast that's happening between episodes with every guest and this one was no different so given the conversation that we had before this episode strappy and I have no idea where this is going to go because I just spent a whole almost half an hour talking about mushrooms so let's see how it goes so we're not admitting to anything there but this could sound very different to what the rest of the five part series sound the other four episodes so Matthew Fonten from our cana coffee marketplace we are talking about the 2026 Ethiopia coffee harvest and in this episode we're going to talk about a lot of things we're going to talk about what you should be doing now that you've heard everything that we've just spoken about and we also want to talk about some strategies that you might be able to take with the information that you've got but I'm sure we're going to talk about a lot of other things as well because there's a lot that's going on in the world geopolitically that Ethiopia is right at the heartache given its proximity in this region that I'm living in the Middle East with regards to trade Djibouti is a major trading port that is right in the heat of what's happening with Yemen and with what's happening with Saudi and the UAE and Somalia and Sudan and all of that kind of stuff so I have no idea where we're going to go in this episode but I am going to prophesise and say this is probably going to be the best episode of the series given conversation with your head so Matthew where do you want to start a buckle up okay let's see what people are keeping up for strategies oh my goodness I think the first strategy is just like I said walk a lot yeah right if you're buying it and you can only have it especially if you're looking for specialty you get ready for state or shock yeah process is going to be high i think it's inevitable i even heard from exporters some people that are in specialty just we were really scared to get out these prices some have been received better than others from their buyers but this is your first time or even you were expecting she forgot to eat yeah really it's going to be hard to shoot okay maybe maybe you can browse the marketplace see the farmers are willing to negotiate out of one like in terms of the experts yeah anyone that's honestly buying from exporters anyone that's buying from people that had to partake in the cherry purchase games yeah be ready for sticker shock wow but i think also a strategy is this could be an opportunity for people wanting to source an Ethiopian to look outside their current suppliers so they're buying from them maybe even the regents look to the west look for again maybe some better price coffees and fit your pricing models i don't know we all want to give we all want to work we had producers and they should have been getting a lot but you also have to take care of the other side of the supply chain and if there's i think that if you're a client or your buyers that are buying your coffee or only willing to pay so much it puts you between all the rock and a hard place and i don't think anyone expects you to put yourself in a place where you want business so maybe look out the list look for different origins look for different exporters look at trying to match up you know pricing with quantity and see what you can do well think about going direct through the marketplace right director i don't use this as a plug well i mean the thing is we're trying to give people i get it but we're trying to give people strategies right so using your platform and full disclosure arcana again is an advertiser on the podcast but the reason they're an advertiser is because they offer a legitimate tool that you may not have had the access to try before which is direct trade so that's an opportunity this year that people may not have had and the moc is quite low right 20 bags 20 bags and if someone wants to split that up with a group of people they can work among themselves figure out who's going to take what and but yeah the moc is really nice um we do have some interest going to i think it's going into Belgium so anyone in europe or no Belgium there is like a half a container a bit more of what's going anyway um you can jump on that what really the big thing is actually i would like to preface that in the marketplace even if you see prices that are really high and scary be afraid to put in offers just again you are negotiating to the performers and everything's estimated in the marketplace in a reverse ask yeah worse you get told it's not yeah um or they come back with you all right but getting back to it i think direct trade is an option going out west is an option i should answer something about going out west as well if you do plan on going that route just be cautious it was a bumper crop that means people are going to have more cherry can be difficult for people to process a lot of times they don't add on beds they add on depth onto the beds and you could have more defects so quality may be compromised quality could be compromised um but if you find the right partners out there they shouldn't be an importer should be watching your back well our next boarder should actually be doing the same thing um but yeah just make sure you have good orders out there that are watching the quality coffee um can i ask you something about that if that's okay actually i've heard previous years they've been problems with regards to the water that they use to process a lot of the coffee and you had mentioned in a um previous episode that there might not be as many washed coffees um i should have asked you this then but as we're talking about quality now is the water situation in ethiopia plentiful at the moment hey there's no storage of water a lot of the washing stations are floating locations or they have access to them okay um i really haven't heard or seen many issues of water quality from most places there are somewhere you look at the water you're like it's but it's not the best thing to be working with but if they are sourcing that they usually have like a distillation tank well like a tank where they store it so it's already out of it yeah sedimentation tank that's what um but i don't think that's a massive issue anywhere i have seen i've never seen someone that we're using water without filtering at first they usually if anyone's doing that they have really particular systems for handling that um but yeah water i don't see that being a primary concern okay great what uh some of the things that people should be i guess we've covered some of the strategies um is there anything that you are particularly interested based on what's happened to this year in where it's going to take the industry moving forward in ethiopia or around ethiopia um ethiopia around ethiopia it's kind of falls into mind now like i'll give you an ethiopia go ahead yeah no no go please act or point well there's a lot of geopolitics that's happening right now and that is impacting currency and so with what's happening right now um it sounds like the ethiopian coffee industry internally is um it's lack of a better term growing up um over the right uh it is it is maturing and trying to reorganize itself as the u.s. dollar gets weaker do you think that that from this year given that you know farmers are getting paid more there's more crops on the west um and you know we could see a future where those exporters are banking more u.s. dollar than they did than the 50 percent that they're allowed to bank do you think that they may think about well since we're not tied we don't have to buy coffee in u.s.
dollar uh do you think that they might look at diversifying that in 2027 or beyond do you think that the stability that comes from 2026 in the coffee market in ethiopia is going to have bigger flooring effects i think so i mean with a weakening dollar and without any clear confidence leadership in my opinion the u.s. government from either side of the aisle i don't you can be right need to be left but they both suck now without any confident leadership i see the dollar continuing to slide right now the ethiopia really does a lot of contraction u.s.d and i think it'd be wise for them to start to move away from that because if you have a these guys are fixing their contracts in the u.s. dollars it's coming into the country as u.s.d and then they're purchasing goods a lot of fans from china but the dollar sliding in china begins the value of the one um it's going to just pump up inflation look i think it's going to diversify what ethiopia wants to hold on to really to maintain trading parters in the future for me always indicate china a demand from that country is skyrocketing and i think again u.s. dollar if you're holding dollars you're putting faith in the u.s.
economy and again there's no confidence in your shit in my opinion that justifies having faith in the u.s. economy besides the fact that it's just a juggernaut that's been around for the last you know 60-70 years of World War II but i think that's starting to fade now as new trading blocks for new currencies start to take a place in the line lights i think yeah i think we'll see a lot more diversification we're just good in mind competition's always good i do believe in a free market to an extent and i think competition in free markets is always a positive so we'll see what happens i do think with kind of you're gonna ask me about prediction for 2026 uh-huh i think again it falls back on to this destabilization of the u.s. dollar okay i'm gonna bring a wild prediction now this is take this with a pinch of salt people if you're listening like don't take this is anything more than that but i really do see like from what i've talked to clients it's 350 is this comfortable range where people feel like it's a solid place for coffee pricing to be for commercials that only are buyers confident their ability to sell it but it seems like producers are happy with it so i see it sitting around this 350 mark but i see that this destabilization of the u.s dollar is going to get more people out of bonds and probably into harder assets and although coffee's not considered like a really hard asset it has a lifespan it's harder than you know it's more liquid than real safety it's got real value it has value and it's still liquid it's some way liquid left still a hard asset it it it buffers people against the leaking dollar and i think what we're gonna see is we're gonna have 350 maybe plus or minus 20 cents in there but i think because more people get into it more people are speculating in a future's contracts we're gonna see wild shifts in that range that are like going up and down within the price of a week is shooting up 20 cents down 30 cents um yeah that's my prediction take it or leave it but i will say one thing yeah anything you predict should be based on a even if you have your own predictions i think it's wise to predict more interest from speculators and traders because of a weakening dollar and basically the weakening dollar which will lead to a weakening trust in the bond markets um if you don't want the money there anymore do you think that's my 10 cents well i'm fascinated by it because what i think i well not what i think i see happening what i see happening is that people have lost confidence in us they are fleeing from us assets um and they are starting to question the narrative that they're being pitched us economies doing fine us businesses are doing great uh trump really wants the dollar weekend so that they can use it to help them manage their debt because a weaker us dollar helps pay down debt there's truth to that um there's also consequences to it so people need to be aware of the inflationary consequences to real people um in that situation um so it's a it's a very interesting tightrope but yeah what i see people doing is fleeing to assets where they can store their value gold silver and other claims come in same gold silver are good examples i was surprised when my clients are saying coffee well you can understand why coffee right but physical coffee as a as opposed to right but what i'm worried about is that and what i don't want people to take away from this a futures contract is not the same um or an option is not the same as physical coffee unless you're going to take ownership of the coffee so so if people have to like make that cut in their minds right like futures contracts are rarely you ever take rarely do people actually take delivery while actual coffee is futures contracts yeah usually you buy the contract you sell it and you never think about it again a thousand percent so you never actually had to deliver your car and this is where i wonder if people will flee to speculate on the market because do you know what polymarket is yeah it's a gambling it's a gambling website i don't know if you coughed up or if that was a part of the the reaction um i just love a polymarket it's like it's some pretension smart it's something that happens in the real world so people just bet on everything that's all it's well and and for those who don't know what polymarket is we've talked about a couple of times on the podcast but it is important for you to understand what polymarket is for um that from the perspective of understanding where we're headed in this polymarket is a betting site for lack of a better term no matter how much what we're in this era uh Matthew where um someone will say oh look this is a vessel and like it's also called a cup and they'll say no it's a vessel i'm like but it's a cup and you're supposed to just sit here and have that argument with people um and another person will turn around and say uh look this is an elephant like no it's a cup and they'll say no it's an elephant like i can sit here and have this conversation with a dumb dumb about whether it's a vessel or it's a cup or it's an elephant and we're in a reality now where that's a real thing and so polymarket folks is people are not calling at a betting place but here's what happens one of the things that you go on there and you can say one of the things that they're allowing you to bet on at the moment is will Taylor Swift get married in 2026 yes or no and you bet money on yes or you bet money on no and so the the predictive aspect of the groupthink is supposed to help them come to a better decision the problem is Taylor Swift is and her people everyone is allowed to bet on that as well so and just because they say it's not gambling it doesn't mean it's not gambling and you're not going back to my reference about the cup and the elephant and the vessel right everyone's got a different way to call something but if an elephant's an elephant and a cups a cup don't let anybody trick you into thinking it's any different why what does this have to do with coffee the futures market is the same thing adjacent to them yes right the futures market is gambling people are using options too and they're saying it's hedging but that hedge could go the wrong way this is gambling and i'm Matthew to your point i don't know if that's where people are going to put their money in the i don't know i think though you're a thousand percent correct in that they're going to go on by physical coffee and that will be a fundamental that in my opinion this is not business advice or financial advice i think that is what is going to drive the price of coffee up i mean coffee's proven through wars and a bunch of other thousands of companies people always want coffee so maybe you can sit on it it lasts for like a year i don't know but i just know that client is saying i don't have the money coffee then like stock markets or bombs or anything like that but yeah we'll see i would like to add about poly market go ahead some of this stuff is wild you heard like somebody made like three hundred four hundred dollars they put up a quick that the u.s. put in faith and his way over the following day dropped the twenty money on it next day it happened and they walked away with a two hundred thousand dollars like it's just a way they call these prediction markets i think it's a joke um we're gonna actually use people's money and analysis of what's going on out there so like actually make real world predictions it's gambling based on what you hear it's like gambling on the new so it's common they're connecting now poly market is going to be connected to i think it's cbs on the nightly news they're going to have they're going to use that as a but here's the fucking craziest part about that that Venezuela thing do you know who is on the board of poly market no Donald Trump and the cabinet probably him that need a bunch of money and that's my point like if parliament themselves are the ones that can set what the what the the prediction market thing is going to be uh we voting on Venezuela going in or not if Donald Trump jr is on the board and he knows that this is going to happen and he puts up with that thing and all of his mates get who know what's going to happen can go in and bet on it they may mind they walk away they walk away a filthy reach so much cash and let's let's not forget some of these companies that are trading companies in coffee have enough sway in the markets to swing it in their favor they can do something there is a thousand these guys have insider trading information on poly market some traders they have enough stock and power in the markets to turn it in their favor to make the markets work for them i will give you another example of that you've no idea how many people contact and pay consultants and generalists to put a specific narrative on Bloomberg or on this podcast or on any other publication so that people will panic about something or get excited about something and start other buying or selling contracts to move the market it is great fear and the capitalism you know the the um the supply out of Brazil is going to be up hold on you're saying these three quarters out from the harvest nobody knows what's going to happen to it but what happens after that the price of coffee tanks because we're going to have a record crop next year this kind of puts in the market uh no the person exactly exactly follow the money so Matthew this this conversation did not disappoint after our conversation in but that point comes between podcasts um this has been a true delight i can't wait to have you back again um will you remind everyone how they can get in contact with you and arcana and um find out about the marketplace yes um we are online or kina coffee.com you can find us to search on google we're on all the social media platforms so instagram facebook things like that and then you can reach out to us by email that hello at arcana coffee.com people are reaching out to me already i'm happy to connect with you guys talking to the person if you need support or answer your questions excellent and if you go to the website you can create an account on the on the website and you can start looking at what the offerings are um if i send it correctly is that right Matthew yeah we're still the harvest is actually really late this year in a lot of places later than i thought but we have samples coming to add us as of last week they started coming in we're trying to come through and get them up there um any day now they'll go out but if you sign up for an account as soon as there's like a decent number of samples i'm gonna just send an email everyone with accounts so you'll get a number.
Excellent excellent as always i'll find a question when the future version of you comes back and watches this what do you hope for him? he got ridged off pally martin no i hope you did too i think it was similar to last time i just really hope that our business is successful and we're staying true we just look back as i'm on your state your values you're proving that you know good business can be viable um and we're just killing it we can go a few different countries we've got farmers killing it buyers are happy that's what i want to see a whole healthy coffee trading ecosystem thank you for doing what you do because i know it's not easy to build what you're building and i know that you know if you went into big corporates and use your talents there you'd make a fuck ton of money and instead what you've decided to do is build something that helps you sleep at night and you know you're building for the long term and what you're building actually fixes a legitimate problem that really needs solving so thank you for doing what you're doing and i know that you're building a for profit business but it really does solve a problem which is what we're always encouraging clients to do is like find a problem solve figure out the solution monetize the solution and then you'll be able to build a business that makes you good money and helps you sleep at night as well and so that's what you're doing and so you're setting an example for people that way as well so thanks for doing what you do i really appreciate you being here on the podcast thank you very much thank you very much thank you very much thank you very much thank you excellent thank you one more thing will you sign us off for the series peace on beta bar have an amazing rest of your day everyone bye if you enjoyed this episode consider supporting my before we'd our guests and advertisers on social media subscribe hit the like button leave a comment and share this episode with a friend and if you'd like to support our work more directly become a paid premium youtube subscriber or patreon backer to get early access to the show add free directly to your inbox each week can find links in the show notes