EU provides €15M to improve Ethiopian coffee sector

Ethiopian coffee sector

The European Union (EU) has provided €15 million (about US$16.5 million) to support the competitiveness of Ethiopia’s coffee sector.

In a press conference on 5 September, Ethiopian State Minister of Agriculture, Sani Redi, said the EU’s funding would contribute to improving coffee productivity through addressing the challenges facing the sector.

The Ethiopian News Agency reports the funding will be used to prevent coffee diseases, provide disease-resistant beans, and support research.

Redi said this will help add value to the coffee being exported from 28 coffee growing woredas (districts).

Coffee is Ethiopia’s most important export. According to the United States Department of Agriculture (USDA) attache in Addis Ababa, Ethiopia is expected to export a record-high 240,000 metric tons of coffee in 2019/20.

Production of coffee is expected to rise to 7.35 million tonnes in 2019/20, a 1.4 per cent increase from the 2018/19 season.

Exports account for just over half of overall production and are forecast to grow 0.5 per cent in 2019/20 from the previous year to reach four million 60-kg bags.

The USDA says Ethiopia’s exporters are facing increased regulation, with the government banning several exporters in recent months for defaulting on their contracts and hoarding beans.

While supplies are greater this year thanks to higher yields due to better rains and the reduced prevalence of disease, the USDA’s forecasted yield of 0.82 tonnes per hectare comes in well below the government’s target of 1.1 tonnes per hectare.

The department adds that production continues to face the broader threat of farmers switching to other crops.

“One of the major challenges the Ethiopian coffee sector is facing is that many coffee producers, mostly from the eastern part of the country are tearing out the coffee bushes and replacing them with khat, a plant with stimulant properties,” the USDA says in an official release.

Meanwhile, domestic demand in Ethiopia, Africa’s top coffee consumer, is expected to remain robust, with the USDA expecting Ethiopian consumption to rise by 2.4 per cent in 2019/20 compared to 2018/19.

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