Homepage  Homepage     Search on site  Search on site     To write the letter  To write the letter     Site map  Site map
Agro Perspectiva
We are on: 
   
 


Home > News

Ethiopia: World’s Third‐Largest Arabica Coffee Producer

24.07.2021 10:36 "Agro Perspectiva" (Kyiv) — According to the report of the USDA Coffee: World Markets and Trade (June 2021),Ethiopia is forecast to produce 7.6 million bags (60 kilograms) of Arabica coffee in 2021/22 and is the world’s third‐largest Arabica producer behind Brazil and Colombia. Coffee production is vital to the Ethiopian economy and approximately 15 million people are directly or indirectly involved in the industry. In 2020, coffee exports totaled $800 million and accounted for over 25 percent of total

exports. These funds play an important role in the economy because the Ethiopian Birr is not a convertible currency and U.S. dollars are needed for transactions related to imports and other foreign debt obligations.

Coffee is primarily grown in the Oromia Regional State as well as the Southern Nations, Nationalities and Peoples Region. Within these regions, there are four main cultivation methodologies: forest, semi‐forest, garden, and plantation. Forest coffee grows wild under the shade of natural forest trees and doesn’t have a defined owner. In a semi‐forest environment, farmers remove select forest trees to balance the need between shade and sunlight and can claim ownership of the area by pruning and weeding once a year. Garden coffee is typically intercropped in the vicinity of a farmer’s residence and fertilized with organic material. Commercial plantation coffee covers large, well‐defined areas planted by private investors that often use fertilizers and other inputs to increase quality and yield for export markets.

Annual output grew by about 2 percent over the last decade, but yields have been stubbornly stuck around 14 bags per hectare while other top Arabica producers average yields that are 40‐60 percent higher. Improved crop management practices have not been widely adopted because 95 percent of production occurs on non‐commercial plots typically one‐half hectare or less. Few non‐commercial

growers are interested in incurring investment costs due to the informal nature of their growing method, while commercial growers note that 5 to 10 years are needed to realize a return on their investment.

Disease and substitution limit output expansion. Few non‐commercial growers use fungicides despite the presence of coffee berry disease, coffee wilt disease, and root rot disease, causing suboptimal yields. To mitigate these losses, many farmers are either inter‐cropping coffee with khat or switching entirely to khat due to economic reasons. Khat is a legal stimulant that is relatively resistant to drought, disease, and pests. Also, it can be harvested three or four times a year, and commands high prices in neighboring countries, including Djibouti, Somalia, and Yemen.

Domestic consumption accounts for almost half of output, which is high for a major producing country, with many households consuming coffee two or three times a day. Coffee plays an important role in traditional and cultural gatherings and is consumed during most social occasions. While away‐from‐home consumption has increased through the expansion of regular coffee

shops, small roadside coffee stalls have become increasingly popular in and around major cities. These informal stalls serve coffee at a discount compared to coffee shops because they do not have the same fixed costs related to taxes, rent, and

labor. Because the stalls are not regulated, they often sell export‐quality coffee even though it is illegal to do so. By law, domestic consumption is limited to lower quality coffee that fails to meet the Ethiopian Commodities Exchange (ECX) export quality standards.

With such strong domestic coffee demand, the Government of Ethiopia is also motivated to adopt policies to increase the volume of exports to generate access to foreign currency. These competing interests sometimes put the Government and consumers at odds. For example, because Ethiopia has a trade deficit and limited access to foreign currency, coffee traders have exported at a loss to gain access

to U.S. dollars. These are then used to import products such as construction materials and vehicles to sell at much higher rates of return. In 2019, the Government made it illegal to sell coffee below the international price to remove this distortion from the economy. The following year, the Coffee and Tea

Authority coordinated with the National Bank of Ethiopia to establish the Export Coffee Contract Administration directive, which fixes a minimum coffee export price based on a global weighted average.

The Government has implemented other reforms to address challenges within the coffee sector. For example, the ECX was established in 2008 to reduce price volatility and incentivize farmers to plant coffee. However, its structure did not allow coffee traceability because deliveries were comingled into anonymous

lots of standard grades, losing the ability to sell identity preserved coffee. Open dialogue between the Government and private sector identified this issue that was keeping participants from certifying coffee as organically grown, resulting in a series of reforms in 2017 that reestablished traceability to the washing station.

As Ethiopia moves forward with these reforms, it remains to be seen whether these actions result in rising production and trade.

Agro Perspectiva

< U.S. Production and Exports Forecast Down Despite Global Gains All news for
24.07.2021
BASF with very strong second quarter supported by higher prices and volumes >

18.03.2024  
23:10 The European Union and Switzerland launch negotiations to deepen bilateral relations
10:05 Commission proposes targeted review of Common Agricultural Policy to support EU farmers
15.03.2024  
23:36 Cargill Power CanolaTM Program Helps Farmers Take Advantage of Growing Bioenergy Market Opportunities for Canadian Canola
23:19 FAO will provide Ukrainian farmers with soybean and sunflower seeds for spring sowing campaign
13.03.2024  
23:27 FAO urges more cooperation in banana sector, significant for some least developed and low-income food-deficit countries and smallholder farmers
16:51 The European Commission sets out key steps for managing climate risks to protect people and prosperity
12.03.2024  
20:25 Coreper and COMENVI approve the provisional agreement on EU Carbon Removal Certification Framework
20:24 INTA MEPs fail EU producers by dismissing potential improvements to Ukraine ATMs
08:10 Soybean meal is expected to be a more competitive feed ingredient on higher global supplies.
11.03.2024  
09:11 U.S. Corn Exports Shift Destinations as Brazil Captures China Market
08.03.2024  
15:20 Conflicts push acute food insecurity higher
13:21 FAO Food Price Index declines further in February
13:14 Packaging: Council and Parliament strike a deal to make packaging more sustainable and reduce packaging waste in the EU
11:45 Commission approves ˆ61.3 million Bulgarian State aid scheme to support farmers, producers of grain and oil crops, in the context of Russia's war against Ukraine
07.03.2024  
20:41 First go-ahead to renewing trade support for Ukraine and Moldova
05.03.2024  
15:55 Commission proposes to prolong road transport agreements with Ukraine and Moldova and introduces updates to the agreement with Ukraine
02.03.2024  
07:31 Heroes of deserts and highlands: Nourishing people and culture
23.02.2024  
10:21 BASF’s financial strength supports proposed stable dividend of ˆ3.40 per share for the 2023 business year
10:17 The Council has chosen to ignore farmers' concerns regarding Ukraine ATMs; it is now imperative for the European Parliament to take action
20.02.2024  
20:27 South Asia is anticipated to import nearly 14 million tons wheat in 2023/24
19.02.2024  
13:00 Cargill and ENOUGH expand partnership to provide consumers with innovative, sustainable protein options
17.02.2024  
17:47 Global Environment Facility approves new FAO-led projects and programs benefiting 46 countries
16.02.2024  
09:10 The EU is at a crossroads with the Ukrainian agricultural issue - COPA-COGECA, AVES, CEFS, CEPM, CIBE, EUWEP
13.02.2024  
17:31 European farmers exempted from rules on land lying fallow
12.02.2024  
16:45 India Wheat Stocks Plummet to Lowest in 15 Years
03.02.2024  
17:35 Mandarins. Global production for 2023/24 is forecast to rise to 38.0 million tons
09:59 Record cereal output in 2023
07:15 FAO Food Price Index down again in January led by lower wheat and maize prices
29.01.2024  
10:32 President von der Leyen launches Strategic Dialogue on the Future of EU Agriculture
26.01.2024  
11:31 Record Exports Forecast for Egypt Oranges
23.01.2024  
17:55 With the Federal Chancellor in the show bakery
19.01.2024  
11:45 Organic production in Ukraine
16.01.2024  
23:25 Domestic consumption of dairy products may double in 2024 – analysts
12.01.2024  
23:53 Competition Tightens for Leading Pork Exporter
22:55 Peru Fish Meal Exports at Lowest Level Since 2015/16 El Niño
22:43 Grains Trade Disrupted by Challenges in Key Shipping Routes
10.01.2024  
15:38 In China, the largest import market for dairy products, surplus raw milk production led to government subsidies to stabilize the domestic processing sector
09.01.2024  
11:55 The FAO Sugar Price Index averaged 134.6 points in December, down 26.8 points from November
06.01.2024  
12:43 Polish fish and seafood imports continued to grow in 2022 and reached over $3 billion, with a $129 million (4 percent market share) originating from the USA
05.01.2024  
17:21 EU imports are dominated by unroasted green coffee beans, which accounts for about 90 percent of trade
17:00 FAO Food Price Index declines in December. Benchmark measure of world food commodity prices ends 2023 about 10 percent below its year-earlier level
29.12.2023  
09:53 Global and Bank of Georgia sign EUR50 million loan agreement to support small businesses
28.12.2023  
16:47 EIB delivers EUR3 million for energy-efficient upgrades in three Ukrainian cities
27.12.2023  
23:11 EU agri-food trade surplus increases in September 2023
26.12.2023  
15:05 FAO and EU launch a second grant call to bolster the recovery of Ukrainian farmers
18.12.2023  
09:00 EIB Global offers support to Ukraine, Moldova and Georgia on the next step of their EU accession paths
11.12.2023  
13:21 FAO Food Price Index holds steady in November
09.12.2023  
22:15 Donau Soja: Republic of Moldova increases soya harvest in 2023 and boosts market opportunities in the EU
24.11.2023  
12:25 SUGAR MARKET BY SESVANDERHAVE
09:32 BASF signs CNY 40 billion syndicated bank term loan facility with maturity of 15 years for its Verbund site in Zhanjiang, China

Also available: 


NewsNews - News - News - News - News - News
BriefWeekly Reports - Free article
SubscriptionTariff - News&Reports
AdvertisingMagazine - Site
ConferencesForum AGRO-2013 - DAIRY WORLD-2008 - FERTILIZERS-2010
Statistics
For our clientsAgroNewsDaily - Ukrainian Grain&Oilseed Market - Fertilizers - Milk Monthly - Milk Weekly
About usAbout project - Contact
2002 -2024 © Agrarika, ltd.
tel.: +380 67 4473802; +380 67 5964652
e-mail: client@agroperspectiva.com