BY ABEBE WOLDEGIORGIS
It is obvious that Ethiopia is the birth place and botanical garden of coffee Arabica with an almost fertilizer free environment. Though it has been exporting the commodity to the oversea market for more than 80 years, it did not obtain what it had to secure from the coffee industry.
The Ethiopian coffee known as “Green gold” with its own peculiar taste is produced in wild and by dedicated small holder farmers but the profit derived from the product, instead of going to farmers it rather illegally goes to the bully of the brokers and foreign importers.
The Ethiopian coffee known by its test and organic specious grew by different geographical areas of the country but after many decades only recently the nation could earn worth of more than 1 billion USD.
For many, the achievement seems not amazing because the accomplishment is too late.
The coffee product traditionally known as the “Economic Pole” until recently, the sector was chained by various problems from production up to marketing. Among others, fluctuating coffee price, sluggish purchasing and marketing system, in related to logistic the prevalence of shortage of containers can be mentioned as measure factors.
In addition to these, poor practice of exporting processed coffee through adding value, security problems, facing organized robbery act while the product is transported from place to place and illicit trade can be mentioned.
In many occasions, government officials announced that actions have been taken to deter the illegal coffee trade. However, the practice is still continued and benefits few offenders. In contrary, professionals assert that the export of coffee is declining due to various reasons.
On the other hand, the Coffee and Tea Authority which has the mandate to enhance the productivity and market system of coffee, tea and spices for the last three years has been reforming the authority’s structure, rules and working environment, attributes to the registered better results in terms of raising productivity, increasing export volume. For instance, in the last two years, Ethiopia has gained more than a billion Dollar from coffee export and the amount has a lion share from the total export earnings. According to authorized sources, in the year 2013 Ethiopian budget year, Ethiopia earned 907 million Dollars from 248,311 tons exported coffee. Contrary to this, in the 2014 budget year, Ethiopia earned staggering hard currency which it ever had registered worth of 1.4 billion Dollars by exporting 300 thousand tons coffee products.
Last year, Ethiopia earned 4.12 billion Dollars from its total export items and out of it more than 1/4this came from coffee export.
Within the exported items about 72% was agricultural products of which 35% is coffee product.
Coffee export is playing pivotal role in earning hard currency to the nation. Recently, when the Ethiopian coffee day was celebrated, the Minister of Agriculture, Omer Hussein announced that coffee still plays vital role in stimulating the economy. He further said that, to enhance the export earnings by one fold from coffee products, efforts are exerted both by small holder farmers and private investors.
According to the Coffee and Tea Authority, in order to achieve better result in the export sector various measures have been taken and among others, modernizing the supply chain and logistics service through supplying better containers; providing service by Ethio- Djibouti rail transport and one snap shot service provision.
In addition to these, the Ethiopian coffee product varieties were exhibited in international trade fairs and consuming countries like the United States, Europe and Middle East.
Moreover, the coffee products are exhibited through webinars. Taiwan and China are the two strategically identified countries in consuming Ethiopian coffee and they are reported to be among countries that are fan of the organic coffee.
According to the Coffee and Tea Authority Market Development Supervision Sector vice Director, Shafi Omer, the authority is working by formulating two strategies. The first one is sticking on the major coffee importing countries and the other is finding new markets particularly, efforts are exerted to hold countries such as China, Taiwan and Russia.
On the other hand, as countries such as Germany, USA, Saudi Arabia, Belgium, Japan, South Korea and Italy are the major importer countries, efforts are under way to perpetuate the market linkage and to advance it to more lucrative stage.
The recently held third “Cup of Excellence” competition which took place under the auspicious of the authority played vital role for registered tremendous export earnings. On the other hand, among the factors that are responsible for the gained huge foreign currency from coffee export on the just ended budget year are increasing of coffee price in the world market and the damage occurred on the Brazil and Colombia coffee products due to climate induced snow, said a professional with long experience in the sector.
The Ethiopian Coffee and Tea Authority Executive Director, Adugna Debela (PhD) said that the “Cup of Excellence” coffee testing competition played vital role by broadening Ethiopia’s coffee market destination.
For instance, in the near past, South Korea’s share in Ethiopian coffee market was insignificant. However, thanks to the “Cup of Excellence” competition, the share of South Korea and China in the Ethiopian coffee market is enhanced.
The “Cup of Excellence” competition which took place for third consecutive time, in addition to changing the nation’s image, new coffee species was exhibited. Currently, research has been conducted by the authority in order to reproduce the new species coffee. The coffee species which won the competition not only supplied to the foreign market, but also for other customer countries. The coffee type which won in the “cup of Excellent” competition not only benefits the participant and winner farmer, but also the farmers living in the neighborhood. Because the purchasers go to the areas where the coffee is cultivated which create market linkage with the producing farmers which in turn maximized farmers’ income.
By the year 2022 “Cup of Excellence” competition the coffee with the best quality was exhibited and offered for bid online all over the world. And based on the bid, one kilogram coffee was sold for 43,236.23 Birr.
In the first round of competition, the farmer who won the competition sold 300 kilogram coffee and earned 6 million Birr. In the second round of the competition which took place in 2013 budget year, the amount of coffee supplied to the bid was increased to 1,140 kilogram and the farmer who won the competition earned 16 million Birr.
The winner of the third round competition was a farmer who came from Sidama by his name Leggesse Botaso and earned more than 22.6 million Birr from the sold coffee.
Ethiopia has crafted strategic plan for coffee production and export which lasts for 15 years. Among the goals of the strategy, putting in place to earn 4.6 billion Dollars from coffee export is one of it.
Out of the earned foreign currency about 3.6 billion Birr which is 80 percent of it would reach to farmers. The strategy which is planned to be implemented within 3 phases and the coffee which is going to be supplied to foreign markets will be 1.26 million metric ton.
Even though, the coffee export activity is encouraging in the last two to three years, there is anxiety that the recurrent drought and the ongoing war and conflict in some parts of the country might hamper the activities.
Not only these, some argue that, the sanction imposed by the USA to suspense Ethiopia from AGOA since January 1 2022 may bring adverse effect.
Nevertheless, Shafi does not agree with this statement and as to him, in the last budget year, the US continued its purchasing of Ethiopian coffee similar to the past and it is still among the 10 Ethiopian coffee importers countries even in the last months of the budget year it became the second purchaser of the Ethiopian coffee product next to Germany.
He also said that though security problem witnessed here and there had their own impact on coffee trade in addition to COVID 19; it did not bring significant impact which crippled the sector. In the 2015 Budget year, Ethiopia aspires to export 360 tons of coffee products to earn 2 billion Dollars.
THE ETHIOPIAN HERALD WEDNESDAY 28 SEPTEMBER 2022
