Coffee grounded-but not ground down

Addis Ababa, Ethiopia – In spite of high expected harvest in the coffee sub-sector, the half year export performance of the year 2012 appears to be sending chills through the stockholders, write Asrat Seyoum and Birhanu Fikade.

If there is any appropriate time that one can easily examine the impact of price volatility on single-commodity dependent economy like Ethiopia, now appears to be the right one. And Ethiopia in particular would qualify as a good show case, as this year’s export dollars face serious cuts. Why? It is all about coffee, the leading export commodity and producer of the 32 percent of total export earnings in Ethiopia.

In fact, it is not the first time that the sub-sector encountered a roadblock. In the past, the small coffee beans remained to be one of the most controversial agricultural outputs in Ethiopia. However, it appears to be more so in recent times than before. So, what makes the current ordeal more threating is that both local and export destination markets looks to be teaming up; at least the majority of the exporters that The Reporter interviewed seem to think so. Nevertheless, apart from pocketing USD 841million in the last budget year, coffee was far from having a good year. To the contrary, it was a year of turmoil and test for sub-sector. Read More