Coffee is one of the most traded commodities across the world and it plays major role in Ethiopian economy. Ethiopia is the leading Arabica coffee producer in Africa, the fifth largest coffee producer in the world next to Brazil, Vietnam, Colombia, and Indonesia. It is also the tenth in coffee exports; contributing about 4.2 percent of the total world coffee production.
The country exports coffee to the international markets through different marketing channels and structures. Private producers, cooperative unions and exporters are the main actors of the coffee export sector.
It is clear that coffee has economic, social as well as environmental significance to the country and highly connected to the daily lives of the society as almost one-fourth of the population directly or indirectly gains their livelihoods from it.
Ethiopian Coffee Exporters Association General Manager Gizat Worku said that coffee market has shown increment and in the past three months over 84,000 tons, amounted to 231 million USD was exported. Compared to the preceding year, this time has shown increment.
In the stated period, Germany was the largest buyer of Ethiopia’s coffee purchasing 19,000 tons, worth of 46.8 million USD; followed by Saudi Arabia, Japan, United States, Belgium, Korea, Italy, Sudan and France.
This year the Authority has set plan to export 300,000 tons of coffee and activities are underway to raise the quality of coffee beans and expand market access as well as reduce chain barriers.
It is an agreed fact that export has irreplaceable benefits for countries’ economy by serving as the main driver for economic growth offsetting the need of finance to importation. Though, given the limited size of the domestic markets, expanding the export capacity and increasing the competitiveness is vital for rapid growth and development, he added.
Association’s Board President Desalegn Jena on his part said that while domestic coffee price has shown increment steadily, world coffee market price is fluctuated from time to time. To benefit all, from farmers to exporters, strengthening value chain and creating smooth market flow is important. The Association along with the Ethiopian Coffee and Tea Authority is carrying out activities to buttress the market chain from the source to its destination, he said.
Likewise, the government has to identify the problems facing the sector and focus on boosting coffee productivity and providing necessary support for the producers to exploit the potentials of the sector, he remarked.
Shafi Umer Deputy Director of Ethiopian Coffee and Tea Authority on his part said that the Authority is working to further strengthen the sector. It is striving to modernize the marketing system so as to benefit both producers and exporters. In this regard, efforts are undertaken to shorten the marketing chain through connecting producers and exporters directly. This apart from shortening the chain, it will help to curtail contraband. The Authority has also planned to set minimum price for coffee to curb illegal trade and additional challenges. Apart from this, value addition is more important and needs due attention, he added.
The reason why domestic coffee price showed increment is that domestic consumption is high. The increment of domestic consumption has its own advantages and disadvantages, he opined. High domestic consumption benefits the country when there is a fall in the world market price for coffee and it will stabilize market and create conducive environment for the producers to produce more.
The disadvantage of this high domestic consumption is that it leads to contraband when domestic price is high; and awareness is critical to curb contraband. As to him the main challenges are imbalance of demand and supply, lack of awareness and smuggled goods.
The Ethiopian Herald November27, 2019
BY HAILE DEMEKE
