An increase in the quality and market share of coffee exports was set out in the five-year strategic plan of the Ethiopian Coffee Exporters Association (ECEA) that was announced by the association at the Hilton Addis, on Friday, March 25, 2011.
Ethiopia’s coffee exports have only three per cent to five per cent of the global market share, even though it is one of the 10 coffee producers with much room for improvement in export volume, according to Tesfaye Kenna, senior marketing officer and associate general manager of the ECEA.
The country’s exports of 172,000tn in the previous budget year earned it around 528 million dollars, but this is to increase to more than 600,000tn and earnings of two billion dollars at the end of five years, he said.
The goal of growing five million quintals of coffee by the fifth year was also established in the new strategy of the association, which was founded 42 years ago.
These projections were based on a study recently commissioned by the ECEA and sponsored by USAID. It was conducted at a total cost of 200,000 Br by a group of consultants, one of whom is Habteselassie Hagos, former vice president of Commercial Bank of Ethiopia (CBE).
The five-year plan aims to enhance quality in order to boost exports and create a competitive advantage in the unpredictable global coffee market, according to Emebet Tafesse, deputy president of the ECEA and owner of Import Export Plc and Erkab Transit & Advisory Service Plc.
The association plans to open a coffee museum and establish its own permanent offices, she said. It has also completed the business plans for the next half-year and budget year, according to the deputy president.
With global coffee prices at their highest levels in years, and with major coffee exporters in Colombia, Brazil, and Central American countries hit hard by climate change, association members feel that Ethiopia should introduce its products to new markets such as mainland Europe, the US, and China.
The ECEA, which counts the Oromia (OCFCU) and Sidama coffee farmers cooperative unions (SCFCU) under its 98 members, recently participated in the Guangzhou China Coffee and Tea Exhibition.
The OCFCU was established in May 1999, with 34 unions, 22,500 households, and 825,000 Br in capital. It has since grown to 198 unions, more than 200,000 households, and a capital of 100 million Br.
The SCFCU was established in 2001 and had a membership of 87,000 farmers in 2008. The union is known for its annual production of garden coffee amounting to 350,000ql of high quality organic Arabica beans from 70,000ht of land.
The country’s total coffee production in 2009/10 was 2.7 million quintals, a two per cent increase from the previous year. Despite this apparent plateau, Ethiopia remains the eighth largest coffee producer in the world.
“For this reason, using the current high global prices as well as the shortage of supplies from traditional coffee producers in the Americas would be beneficial to our export market,” Emebet said. “However, to stop the price increase from affecting the average coffee user in Ethiopia, we have to strengthen consumer protection unions.”
The ECEA claims it is not only concerned with the consumers, but also local producers.
“The association plans to open a coffee fund in the next five years to support fair prices for coffee farmers and traders,” said Tadese Meskela, general manager of the OCFCU and board director of the ECEA, which aims to create a business facilitation forum for exporters ranging from quality control to informing on current world coffee prices.
“It also plans to build infrastructure [both physical and informational] to mitigate the risks of global coffee price shocks, such as previous ones that harmed farmers, especially those in Haraghe Zone, Oromia Regional State.
Today, 454gr of coffee, after roasting, is reduced by 20pc and sold for between 30 dollars and 40 dollars in foreign markets. Nevertheless, farmers who grow the coffee in Ethiopia get three dollars for the same amount, while 10 years ago it would have fetched farmers 0.60 dollars.
“However, with 60pc to 70pc of coffee in Ethiopia being normal coffee, its packaging, processing costs, port transfer issues, and insurance costs are taking a toll on the coffee industry.”
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