Ethiopia has a wide range of fruit and vegetables, such as avocados, green beans and mangoes. These have great potential in the European market. Still, some steps are necessary for Ethiopia to develop the export market. These include lowering costs, increasing market opportunities, and improving land and sea logistics. Sea freight export offers the capacity to export larger volumes. This export method also has a lower environmental impact.
Total fruits production of Ethiopia which was around 410,000 metric tons in 2015 doubled reaching 800,000 in 2023 according to data of the Central Statistics. The Centre for the Promotion of Imports from developing countries (CBI) started the Fresh Fruit and Vegetables Ethiopia project. This project focuses on transitioning Ethiopia’s horticulture to a sustainable export alternative. In this project, CBI helps Ethiopian Small and Medium-sized Enterprises (SMEs) gain experience in exporting to the European Union (EU), Gulf Cooperation Council countries and other countries in the Middle East via sea freight and currently much progress has been witnessed.
To boost the practices, recently, Ethiopia has launched the remarkable shipment of refrigerated fruits and vegetables to the European market, the Ministry of Agriculture disclosed.
EthioVegfru, a private limited exporter and importer company, has officially launched shipments Sugar Snap and Mange-tout vegetable products to the Netherlands last week at the presence of Agriculture State Minister, Sofia Kasa.
Ethiopia is known for offering ideal climate conditions for the year-round cultivation of vegetables and fruit like mangos, grapes and oranges.
Speaking on the occasion, Managing Director and Founder of EthioVegfru, Tsegaye Abebe indicated that 12 tons of Sugar Snap and Mange tout vegetable products will be delivered to the port of Djibouti, using a container equipped with modern refrigerators and new technology. The fresh produce was loaded at Koka and will be transported to Netherlands via the Ethio-Djibouti transport corridor within 23 days.
This shipment is a milestone in the development of a cool logistics corridor for the export of fruits, vegetables and other perishables by sea freight via the Port of Djibouti.
Noting that Ethiopia has not yet exploited its full potential in the sphere of fruits and vegetables production, Tsegaye said, “We should continue to produce vegetables and fruits on a large scale and increase the export destination markets.”
He also stressed the need for maximizing the utilization of the sector and further investments in fruits and vegetables production. According to the managing director, starting the transportation of vegetable products by ship is a great move for Ethiopia in order to penetrate the global market.
He also urged for redoubling the ongoing efforts and expanding the product as well as presenting it to the markets following the market destinations in European countries have reduced due to environmental protection factors, Tesgaye noted.
The exporter, who has been engaged in horticulture for the past 28 years, noted that the sector has huge potential in job creation and foreign exchange earnings.
Among the bottlenecks of the sector has been foreign exchange, he said, adding that the recently announced macroeconomic reform policy is instrumental in enhancing the earnings from the sector and elevate competitiveness.
At present, there are 31 vegetable exporting farms throughout the country. These farms produce a wide variety of vegetables including green beans, snow peas, tomato, paprika, eggplant, baby corn, onions, and Physalis, type of strawberry. The availability of fertile land, labor, and readily available water together with cold chain facilities at three airports and a rapidly improving road and rail transport network all make Ethiopia the right place to invest in vegetables.
Eshetu Abraham, a horticultural expert at the Ministry of Agriculture said that, Ethiopia has already embarked on a big task by starting the shipments of various vegetable products through using modern refrigeration containers. The European fruit and vegetable market is very competitive. One should need to meet multiple of requirements if he wants to export to this market.
These requirements are either mandatory, set by European regulations, or private, requested by buyers. Private requirements are referred to as certifications. Almost all the certifications on the European market are social and environmental in nature. Their main goal is to protect European consumers. Some certifications are more specific to the prioritized markets.
He further said that, Europe is a large and stable market for most fresh fruits and vegetables. The demand for year-round availability and a wide choice of produce maintains Europe’s dependence on suppliers from outside Europe. The consumption of healthy, mostly conventional products like sweet potatoes and avocados will continue to increase.
The European blueberries market will also remain interesting, especially giving chances for organic-certified product. Some products will continue to benefit from potentially reduced local availability in Europe, such as watermelons, pumpkins, and sweet peppers.
As to Eshetu, currently, Djibouti is a major export transit for Ethiopia’s fruits and vegetables, accounting for over 70% shipments. The horticultural products sold last year, generating handsome amount of dollars. Tomato, strawberry, and cabbage are the top commodities.
Although revenues from the export of fruits and vegetables jumped by 43% compared to the previous year, officials say the market is plagued with illicit practices such as over-invoicing.
Anticipating an increase in earnings, the authorities raised the minimum price threshold last January. The decision came a month after a delegation comprising dozens of exporters led by Tewodros Zewdie, head of the Ethiopian Horticulture Producer Exporters Association (EHPEA), visited Djibouti to forge deals and boost export volumes.
Tewodros also said that, properly managing the market-based foreign exchange will be a great opportunity for the export trade.
The macroeconomic reform will bring Ethiopia into a market-based foreign exchange system, which is believed to benefit citizens engaged in foreign exchange earning sectors, including vegetables and fruits. Recall that Ethiopia has been undertaking significant economic reforms to open up the economy.
There are over 200 registered fruit and vegetable exporters, a quarter of which operate their own farms. These farms produce a wide variety of fruits and vegetables, including bananas, mangos, onions and tomatoes.
Currently, the flower, fruit, vegetable, and herb farms occupy 10,897.21 hectares of land. The horticulture sector employs 199,640 citizens. In hard currency generation, the horticulture sector has stood at the fourth largest in export earnings.
Demis Chanyalew (PhD) is an agriculture expert specialized in fruits production. He said that Ethiopia has vast agro-ecology suitable for fruit and vegetable production but still produced by small scale farm level. As the result, the supply of the production is insignificant both to the domestic and foreign markets. Hence, to tap the potential market engaging aggressively on the sector through investing knowledge, capital and skills is essential.
Expanding the irrigation system and boosting the production creates job opportunities to thousands, enhance supply to the market and supports the endeavor for ensuring nutrition security. Vegetables are nutritionally rich crops. In addition, unlike animal products such as met and milk they are cheaply obtained. According to studies, the demand for vegetables in the urban centers is growing.
Currently, in the urban centers such as Addis Ababa, Dire Dawa, Hawassa, Adama and Bahir Dar, the demand for fruits and vegetable is growing and this clearly shows how market opportunities are flourishing. Therefore, if the sector is boosted to the higher commercial level, in addition to meeting the demand, it enables to create job opportunities to thousands and enhances the nation’s competitiveness in the world markets.
The government realized that export trade can play crucial role in enhancing the nation’s foreign currency earning capacity and reserve and to that end, agriculture plays a dominant role in export earnings.
To encourage local and foreign investors engaged in fruit and vegetable production, it introduced new laws by repelling outdated laws which had been instrumental for bureaucratic havoc. Provided tax holidays for five years when their firms start business, created enabling environment to get access loan and the recently introduced market driven exchange rate further strengthen their export capacity. Hence, by exploiting the created opportunities more investors can tap both local and foreign markets by supplying their horticulture products.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD TUESDAY 19 NOVEMBER 2024
