Ethiopia says coffee rebound will boost exports

Ethiopia is pinning its hopes on a rebound in harvests and prices for its crucial coffee sector to boost export earnings to $2.9 billion in 2009/2010, the trade minister said on Wednesday. Coffee accounted for some 60 percent of Ethiopia’s foreign exchange revenue in the 2007/2008 (June/July) season, when it earned more than $525 million from exports of 170,888 tonnes of mostly high quality arabica beans.

But earnings slumped to just $375.8 million for 133,993 tonnes in 2008/2009 after bad weather obliterated entire crops in some growing zones.  Coffee production this fiscal year is estimated to be 20 to 30 percent more than that of last year, » Trade Minister Girma Birru told Reuters in an interview.

« So we hope the setback we faced last fiscal year will be resolved this year. The export targets we have set for 2009/2010 will be largely fulfilled by coffee. » Girma did not estimate how much hard currency the increased yield would earn for the Horn of Africa nation but said he doubted it would reach $500 million.

Ethiopia earned $1.5 billion from its mainly agricultural exports in 2008/09. The country’s coffee exports last year were also shaken by Japan’s insistence on testing beans on arrival after it found some were contaminated with pesticides. Japan, which once bought almost 20 percent of Ethiopia’s beans, said in September it was willing to resume imports.

Ethiopia prides itself as the birthplace of coffee. Some 15 million smallholder farmers grow the crop, mostly in forested highlands in the west of the country.

Ethiopia has so far this year fallen far short of its ambitious export target, posting earnings of $343 million in the first quarter (July-September) of this year, 31 percent lower than the $496 million necessary to hit target. « That is because our new crops do not arrive in the first quarter. When new crops arrive in December and January we will see the increase, » Girma said.

He said October’s earnings improved on the first quarter figures and indicated export earnings were now up 5.5 percent on the first four months of 2008/2009. Girma said higher gold prices, bigger yields of cut flowers and a steady sesame trade would also help meet the target. Ethiopia on Tuesday signed a deal with a Saudi firm to extract about 20 tonnes of recoverable gold found last month. A British company has found another 23 tonnes.

The country makes about $105 million a year from gold exports and that could double when the Saudi firm starts its extraction, the government told Reuters on Tuesday. Flowers earned $177.6 million for the country last year on the sale of 1.5 billion stems. Although international demand and prices were down, an increase in production should see off any shortfall in 2009/2010, Girma said.

Africa’s biggest coffee exporter is also the world’s fourth-largest sesame exporter after China, India and Myanmar, « Sesame seed production is not less than last year so it is an important product that will also help us to increase exports, » Girma said.

Source : Reuters