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: Worlds 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 worlds 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 doesnt 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 farmers 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 >

06.08.2022  
15:38 FAO Food Price Index registered a steep drop in July
03.08.2022  
15:55 BASF enters power agreements for clean energy supply of more than 20 BASF sites across the United States
13:22 FAO to boost soil nutrient mapping in Central America and sub-Saharan Africa $20 million contribution from U.S.A. will catalyze more efficient use of fertilizers
12:21 Europe and Central Asia: Promoting green agriculture to transform local agrifood systems
11:23 Ukraine: Canada contributes USD 40 million to cover 2.4 million tonnes of storage
29.07.2022  
16:55 South Africa Fresh Orange Production and Exports Climb Higher
26.07.2022  
11:28 BASF transforms market towards certified, sustainably sourced coconut oil
23.07.2022  
02:43 Black Sea grain exports deal a beacon of hope amid Ukraine war - Guterres
07.07.2022  
12:43 Russia illegally exports 150,000-170,000 tonnes of grain from Ukraine per month - Ukrainian Ambassador to Turkey
28.06.2022  
08:35 Export prices for milling wheat again fell slightly
27.06.2022  
09:50 No concrete agreements on holding talks with participation of Ukraine, Russia, Turkey, UN on grain export MFA
20.06.2022  
20:32 Coca-Cola to cease production and sales in Russia
14.06.2022  
16:27 Afghanistan: FAO and the World Bank step up their response to the worsening food security $195 million emergency project aims to provide critical life-saving and livelihood assistance to smallholder farmers
13:32 Ukraine calls on other countries to abandon export restrictions - trade representative
13.06.2022  
12:26 India bans wheat exports to ensure sufficient domestic food grain supply
03.06.2022  
10:28 Thailand Sugar Production and Exports Continue to Rebound
02.06.2022  
11:11 Global rapeseed supplies in 2022/23 are projected to a record 100.5 MMT
31.05.2022  
12:51 Global soybean production in 2022/23 is forecast at a record 394.7 MMT
24.05.2022  
09:05 Global soybean production in 2022/23 is forecast at a record 394.7 MMT
17.05.2022  
15:00 Ukraine rapeseed production is forecast to rise despite the ongoing hostilities
10:49 2021/22 Indonesia Palm Oil Exports Slashed
16.05.2022  
15:45 Astarta Completed Spring Planting 2022
15.05.2022  
16:37 2022/23 Grain Consumption Exceeds Production, Stocks Tighten
11.05.2022  
14:31 EBRD to play key role in support of Ukraine, President says
09.05.2022  
11:15 Vegetable oil and maize prices slightly decrease after recent surge, while rice, meat, dairy and sugar prices slightly increase and global trade prospects dim
29.04.2022  
14:03 BASF achieves strong EBIT before special items despite significantly higher energy and raw materials prices
28.04.2022  
17:52 EU takes steps to suspend all duties on imports from Ukraine
16:27 BASF to wind down activities in Russia and Belarus except for business that supports food production
27.04.2022  
13:54 EBRD enhances trade finance for Ukraine
09:11 Coca-Cola will provide assistance to Ukraine for up to $15 mln
26.04.2022  
20:35 Indonesia. Despite the expected increase in production, imports of raw sugar are also forecast to increase
19:43 Australia is expected to produce another big grain crop in MY 2022/23 after a record setting winter crop and strong summer crop production in MY 2021/22
21.04.2022  
10:15 The Ukraine Conflict and Other Factors Contributing to High Commodity Prices and Food Insecurity
16.04.2022  
16:25 WFP appeals for access to encircled cities in Ukraine
12.04.2022  
11:35 Global cereal trade and utilization in 2021/22 revised down
10:25 FAO Food Price Index posts significant leap in March
07.04.2022  
08:49 FAO launches new phase of agriculture policy initiative with $11 million grant from Bill and Melinda Gates Foundation
29.03.2022  
21:32 Astarta Starts Spring Planting
24.03.2022  
21:15 Pakistan. Wheat production in 2022/23 is forecast at 26.4 MMT
14.03.2022  
13:21 CNH Industrial Statement on Ukraine and Russia
10.03.2022  
11:10 Market Signals to Sell Soybean Stocks
09:05 2021/22 Grain Trade in Flux Amid Russia-Ukraine Conflict
07.03.2022  
12:40 FAO Food Price Index rises to record high in February
03.03.2022  
11:25 The Food Front is open: the food of Ukraine will provide citizens with products under any conditions!
11:21 Ukrainian CCI ask all international trade associations to cease cooperation with representatives of russian trade associations
23.02.2022  
14:05 Astarta Invests USD14.6m in the Construction of a Modern Sugar Storage Silo
16.02.2022  
13:18 Brazil. The drought in the south of the country has dampened prospects for a record crop
10.02.2022  
17:21 World Pulses Day leverages the power of youth to transform agrifood systems
17:17 Shrinking South America Soybean Production Constricts Trade and Boosts Prices
12:10 Astarta Builds its First Silo in the Chernihiv Region

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 -2022 © Agrarika, ltd.
tel.: +380 44 5934543; +380 44 5934540
e-mail: client@agroperspectiva.com