The international market has continued to witness a sustained downward trend in the price of coffee,
Thus, a kilogramme of coffee was traded at
This slump in prices has deeply affected coffee producers, as well as exporters in
Mormora grows coffee on a 200ha of land in the
Hailesilassie recalls that for two of these contracts, the Company had produced large quantities of coffee and prepared it, confident of sales since the buyers were long-time customers.
"But it never worked, as one after the other refused to buy, eventually cancelling the contracts," he recalls.
At the heart of the decision from these buyers, say Hailesilassie and other exporters approached by Fortune, is the decline in demand.
A representative of a coffee exporting company working in Yirgacheffe, a coffee growing Woreda located in the
"What has made the situation even more worrisome is that the input costs for the coffee farm is increasing," she complained.
The other exporters attribute the problem to the decline in coffee price in the global market.
The weak negotiating capacity of exporters and poor product quality are identified by the Ministry as reasons for the poor performance of the sector.
"What the Ministry can do is to facilitate the export process by feeding exporters information about the market," says
However, for some exporters it is the long chain to export that has hindered the overall profitability of the industry. This leads to the presence of various middlemen in the export process, pushing growers and exporters into deficit.
During the period under consideration,
"We are price-takers," said the coffee exporter from Yirgacheffe. "But the price decrease discrepancy is causing us to sell less."
Ethiopian authorities see an increased volume as a way of compensating for the slowdown of the market following the global economic crisis.
"The fall in price, however, will be compensated by increasing the volume of exports and creating market linkages with a few selected countries," says Abdurahman from the MoT. "Trade links have also been strengthened to address coffee export in Asian countries, like
The fall in export revenues has also affected other agricultural exports, such as flowers, oil seeds, pulses and khat, although the latter two did perform better than the rest. The flower sector - which grew fast, overtaking all other African exporters except
Power cuts, logistics and a shortage of land are among the problems flower growers mention. They hope to get more land and boost production during the second half of the year, according to
The export experience of other items has been relatively better. Oil seeds, pulses and khat have registered 76pc, 84pc and 92.6pc performance, respectively, with exports totaling 208.8 million, 107 million and
Gold has been affected with a fall of 40pc, while the still small manufacturing sector has achieved close to a
"Greater concentration on a few traditional exports, such as coffee, must quickly end," Abdurahman said.
The fix includes exporting more sesame. The government also wants to export more coffee despite the fall in prices in the international market, he says.
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