Ethiopia's coffee exports in 2024/25 are expected to reach US$2 billion!

Recently, according to media reports, Ethiopia plans to expand the area and trade of coffee. According to the Ethiopian Minister of Agriculture, Ethiopia not only hopes to become a big coffee producer, but also hopes to improve coffee production and product quality, leading the competition around the world.

To achieve this goal, the Ministry of Agriculture is working to ensure that coffee production meets global challenges, noting that this helps the African coffee industry to be competitive and flexible in the global coffee market. The minister also mentioned that Ethiopia would export its own amount by producing coffee, both in terms of quality and output.

Earlier, Ethiopia had planted billions of coffee trees as planned over the past five years and began introducing mechanical assistance aimed at maintaining coffee production and building an economy that could adapt to the climate. This year has achieved good results. According to figures released by the Ethiopian Coffee and Tea Administration (ECTA), in October, Ethiopian coffee exports were about 35000 tons, an increase of about 15000 tons over the same period last year, with foreign exchange earnings of more than US $150 million and an increase of US $62.08 million over the same period last year.

In addition, the coffee industry achieved 176 per cent and 144 per cent of its monthly export volume and export targets, respectively, according to ECTA. It is Ethiopia's coffee supply to the global market that has grown significantly since the start of fiscal year 2024 in July 25. In the last fiscal year (July to June), Ethiopian coffee exports reached US $1.43 billion, and in this fiscal year, the coffee industry is expected to break the record income record.

As a result, the Minister of Agriculture said that the export target income of Ethiopian coffee could exceed 2 billion in fiscal year 2024, and the department was working to improve product quality, market access and welfare. And will work with countries to find sustainable solutions to the problems facing the African coffee industry.

In addition, the Prime Minister of Ethiopia and the President of neighboring Somalia recently signed the Ankara Declaration in Ankara, the capital of Turkey, with the mediation of the President of Turkey, announcing that they would promote peace and cooperation. The incident stems from an agreement reached between Ethiopia and the Somaliland regional government in January this year in exchange for leasing the port of Berbera in the Gulf of Aden in exchange for Ethiopia's recognition of Somaliland as an independent country in the international community.

The Somali government is dissatisfied with the signing of the agreement between Ethiopia and Somaliland, believing that the agreement infringes on Somali national sovereignty. As a result of protests in Somalia, Ethiopia was eventually unable to obtain access to new ports, and relations with Somalia, Egypt and other countries continued to deteriorate.

Until recently, with the assistance of Turkey, Somalia and Ethiopia signed the Ankara Declaration, in which the two sides reaffirmed their respect for each other's sovereignty, unity, independence and territorial integrity. And Somalia has agreed to provide Ethiopia with a reliable and safe sea passage, while Ethiopia needs to respect the territorial integrity of Somalia. In addition, the two sides will start technical negotiations by the end of February 2025 and complete and sign the final agreement within four months.

This could significantly boost the import and export of Ethiopian goods, which previously relied mainly on the port of Djibouti in neighbouring Djibouti, which has been affected by the Red Sea crisis, which has led to a significant reduction in the number of ships docked and affected Ethiopia's import and export business, and there are reports that a lot of Ethiopian coffee is piled up at the port terminals and cannot be exported. However, the situation will be resolved soon.

However, at present, there are still many challenges in Ethiopia's coffee industry, the most important of which is price fluctuations. It is reported that the Ethiopian currency fell sharply due to the country's new fiscal policy in July, although it is beneficial to exports. but at the same time, it has led to rising prices in the country, leading to rising planting costs and rising coffee prices.

In addition, the country has recently introduced a new export pricing mechanism for raw coffee beans, which will set coffee prices based on the futures prices and exchange rates of Arabica coffee on the ICE Intercontinental Exchange in New York. But at the same time, international futures prices are very unstable, rising and falling by more than 80% so far this year, which also leads to instability in export earnings and affects the competitiveness of the country's coffee.