As late as February 2023 called for sixth below average rainy season in southern Ethiopia, but a shift in climate condition in March caused a revision to above average rainfall, March rainfall total was more than 300 percent above average. The heavy rainfall which started in March continued to this day. The heavy rainfall causes flooding, damaging infrastructure, agriculture and driving displacement.
The damage of the infrastructure, especially the damage on the driving routes has a huge effect on the shipment of coffee. As the roads to the coffee origins are mostly gravel roads, The unexpected heavy rainfall made the road too muddy and became a huge safety hazard, which made the shipment of coffee from the origin very difficult. Even in this arduous situation our trucks strain hard to make it on time but are still exposed to delay.
The heavy rainfall also has an effect on the coffee bean moisture content. With the unexpected rainfall, we have been facing the issue of a very high moisture content in the coffee. In order to optimize its quality potential, we dry the bean under sun in Addis Ababa at our facility which is still experiencing a very high rainfall as well. This drying process takes days, maybe weeks which has a huge impact on the time frame. Currently we are trying to find other mechanisms to dry the beans to ensure the coffee is still in its best quality potential, not losing its processing value and its desired output. Hopefully these other techniques will cut down the delay days.
The other factor which caused the inconvenience is the coffee certification process. Previously coffee inspection and certification was done in Addis Ababa. Starting from April 2023 the Ethiopian coffee and tea authority made a new reform on coffee testing and approval to be done at facilities in their own respective regions. As the new regional facilities lack operational efficiency, there is a large queue of trucks waiting 3 to 5 days for their coffee to be tested and approved. Which takes only a day by the previous system.
Also security issues have its impact on the issue we are facing. Nowadays in Ethiopia there are high security threats. Especially when it comes to transportation, moving from one region to the other, there is a high risk of security. Moreover there is also a high chance of theft mainly when using outsourcing trucks. To eliminate the risk of losing our well processed coffee, we have been conducting the transportation only with our own trucks for the past months. These cuts close to 50 percent of the truck we outsourced. Which has a huge impact on the needed output of coffee. Lately we have started outsourcing trucks by finding other control mechanisms and taking the risk to minimize the inconvenience we have been facing. And on another news, the Ministry of Trade will impose a new 15% tax on coffee that has been kept undeliverable for more than 12 months in order to speed up shipments and incentivize exporters to do so. Additionally, "hoarding" coffee without transporting it is punishable. The initiative is the government's most recent effort to draw in foreign exchange in order to increase exports and fortify the native currency.
With all these hindrances and obstacles we are working hard to eliminate the challenge we have and deliver best quality coffee with effective shipment. We are always looking forward to finding a solution and continuing to be an outgoing company. We are always striving hard to achieve the commitment we have with our clients. We are truly content with the patience and understanding you have been conveying, and we assure that we are working diligently to overcome the issues.