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 >

23.04.2024  
16:23 MEPs approve trade support measures for Ukraine with protection for EU farmers
17.04.2024  
18:08 Ministry of Agrarian Policy and Food predicts this years harvest of grains and oilseeds at about 74 million tonnes
16.04.2024  
12:12 West Africa Cocoa Shortage Pushes Up Prices
11.04.2024  
23:48 U.S. Soybean Meal Exports Forecast at Consecutive Records in 2022/23 and 2023/24
23:10 EU Wheat Exports Challenged by Russias Growing Dominance
11:30 Country of origin of honey must be clearly visible on the label. EU honey traceability system to be developed
10.04.2024  
15:59 Commission starts setting up the Agriculture and Food Chain Observatory
15:33 Commission approves 2.2 billion German State aid scheme to support the decarbonisation of industrial processes to foster the transition to a net-zero economy
13:17 Donau Soja urges EU for clarity on EUDR implementation
09.04.2024  
10:44 Ukraine remained the third source of EU imports in 2023, with a value of EUR 11.8 billion
06.04.2024  
10:04 World cereal output seen up in 2023/24
09:55 FAO Food Price Index rises in March
05.04.2024  
10:04 Shellfish Crop Insurance Program Offers Oyster Producers Needed Protection from Environmental Challenges and More
03.04.2024  
23:01 Croatian horseradish root Ludbreški hren' added to register of Protected Designations of Origin
02.04.2024  
10:15 FAO and chef Fatmata Binta announce new project to empower women fonio producers in Ghana
28.03.2024  
12:55 Council compromise on Ukraine ATMs Only a half step forward in the right direction
09:18 Commission approves amendment to Italian State aid scheme to support companies in Friuli Venezia Giulia in the context of Russia's war against Ukraine
26.03.2024  
10:55 Projected famine in Gaza: FAO urges immediate access to deliver urgent and critical assistance at scale. About 1.1 million people are experiencing catastrophic food insecurity
08:44 EU makes major step forward in the delivery of 2024 humanitarian aid for Palestinians in Gaza*
25.03.2024  
16:17 Commission approves 86.9 million Bulgarian State aid scheme to support farmers in the context of Russia's war against Ukraine
21.03.2024  
11:15 Commission takes action to boost biotechnology and biomanufacturing in the EU
20.03.2024  
11:13 Deal to extend trade support for Ukraine with safeguards for EU farmers
19.03.2024  
09:43 CAP - The Commission proposes simplifications that safeguard agricultural transitions!
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 61.3 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 BASFs financial strength supports proposed stable dividend of 3.40 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

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