Ethiopia’s Plan To Boost Coffee Export Hurts Local Consumption

Written by Kevin Mwanza

Ethiopia’s plan to become the second largest coffee producer in the world and exporter more of the commodity is likely to starve local lovers of the steamy drink the best quality beans.

Coffee farmer in the African nation, which is currently that fifth largest in the world, are in a tug-of-war with the government over the amount and quality of coffee to be exported and consumed locally, Zagabi reported.

While the government wants to take advantage of high coffee demand on the international market to increase the amount of high quality coffee exported, farmers want more of their best quality coffee beans sold locally, where prices are said to be even higher than internationally.

“In most cases, the domestic price is higher than international prices,” Fikru Amenu, an agent with the Ethiopian Coffee and Tea Development and Marketing Authority, told Zegabi.

Ethiopians are the highest consumers of coffee in Africa and a growing middle class in the East African nation want to be served with the best coffee.

The country’s more than 93 million people consume about half of its locally produced coffee.

Coffee is Ethiopia’s top export, and it raises up to a third of the country’s foreign exchange. The government wants hard currency to finance its appetite for infrastructure.

The government’s plan to export more of the commodity is likely to cause a shortage in the domestic market, which could attract low quality imports to fill the gap.

Coffee traders have been mandated to export their best quality beans. Only coffee beans damaged by insects or moisture can allegedly be kept in Ethiopia, The Wall Street Journal reported.

A fine of $2,000 and a jail term of about five years could be meted out to traders who flout the law.

“We are just trying to convince (the traders) to export, because of the harder currency,” Fikru said.