Tuesday, November 5, 2013

Ethiopia aims to lift coffee exports to offset price fall

ADDIS ABABA (Reuters) - Ethiopia plans to increase coffee exports by a third by the end of the 2013/2014 fiscal year to help counter a fall in revenues due to lower coffee prices, the head of its coffee exporters association said on Monday.

Coffee exports from Africa's biggest producer hit a record high of 198,706 tonnes in 2012/13 but earnings of $744.9 million were lower than 2011/12, when sales of 169,391 tonnes earned Ethiopia $833.1 million.

The World Bank says international prices for coffee declined by about a third between the two periods.



The slide in coffee exports weighed on overall export earnings, which slipped to $3 billion in 2012/2013 from $3.15 billion a year before. Ethiopia produces the arabica bean.

"We will try to export more because there is enough production for export," said Hussein Agraw, president of the Ethiopian Coffee Exporters Association.

"Last year it was 200,000 tonnes, now we want to increase that by 70,000 tonnes," he said, adding that Ethiopia was seeking to boost exports to China and South Korea.

Four million smallholder farmers grow coffee in the misty forested highlands in the west and southwest of the country. A total of 15 million people are involved in some part of the coffee industry in the nation of 90 million.

Commodities trader and coffee supplier Olam International said on Monday the global coffee market could find a floor around current levels as low prices as some farmers cut output.

London robustas slid to their lowest since June 2010 on Friday, largely driven by prospects of a record crop in Vietnam, while December arabica futures on ICE Futures U.S. dropped to the lowest in more than four years last week.

"It's worrisome," said Hussein, speaking on the sidelines of the International Ethiopian Coffee Conference in Addis Ababa.

"I'm afraid if things continue like this maybe it can discourage farmers to produce and other stakeholders will be affected too," he told Reuters.
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