Export of Ethiopian cash crop coffee

Coffee is Ethiopia's most important export cash crop and the main source of Ethiopia's foreign exchange earnings. Ethiopia's coffee exports account for about 3% of the world market, making it the eighth largest coffee exporter in the world. Coffee exports increased steadily from 58000 tons in 1990-91 to 110000 tons in 1995-96 and remained at this level in the following years. The export volume exceeded 110000 tons from 2001 to 2002 and reached 127000 tons from 2002 to 2003. As the price of coffee on the international market has been declining for a decade, Ethiopia's foreign exchange earnings have been seriously affected. Before the sharp drop in coffee prices, coffee exports accounted for more than half of Ethiopia's foreign exchange earnings, but now they account for only about 35 per cent. But according to the International Coffee Organization, coffee prices rebounded in 2002, rising from 41 cents per pound in September 2001 to 52 cents per pound in 2002 and 59.7 cents per pound in 2003. The average price in March 2004 was 60.8 cents per pound, an increase of 50% over September 2001. This is excellent news for Ethiopia.

Ethiopian people are addicted to coffee. In 2003, domestic consumption accounted for 42.3% of the total output, with a per capita consumption of 3 kg. But more than half of the coffee produced each year is used for export to earn foreign exchange. The main exporters include the United States, Italy, the United Kingdom, Sweden, Norway, Greece, France, Belgium, Germany and Australia.

Before 1974, the right to produce, process and trade coffee was in private hands. During the military administration, private farms were nationalized and smallholder coffee producers were snubbed. In 1991, the Ethiopian Transitional Government issued a new economic policy to encourage private businessmen to export coffee. As a result, the number of private coffee exporters has increased sharply. Nearly 90% of coffee exports are now in the hands of private exporters.