ADDIS ABABA (Reuters) – Ethiopian coffee exports will fall by 30-40 percent in 2009/2010, but the country hopes to become the world’s biggest sesame seed exporter this year, the Ethiopian Commodity Exchange (ECX) boss said on Friday.
Ethiopian officials have blamed bad weather for near total crop failure in some southern growing zones this season, and ECX chief executive Eleni Gabre-Madhin said the global economic slowdown was also hurting overseas sales.
“This year we’re likely to see a 30 to 40 percent shortfall in coffee export earnings relative to last year,” she told Reuters in an interview at her office in Addis Ababa.
“But we are projecting to export 225,000 tonnes of sesame, earning about $250 million, which is likely to make us the world’s largest exporter.”
The ECX began trading sesame for the first time last month and potential investors in the sector from China and India have already visited the Horn of Africa nation, Eleni said.
Africa’s biggest coffee exporter is also the world’s fourth-largest sesame exporter after China, India and Myanmar, exporting 124,291 tonnes of sesame last year.
Eleni said Ethiopia could set the benchmark price for sesame in the future. “It’s a big ambition for a little country, but we have that potential,” she said.
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 Eleni said the cash-strapped nation would only make about $300 million from its biggest hard currency earner this year, partly due to the global economic slowdown.
“It’s not insignificant that some of the higher-end premium coffee outlets are scaling back,” she said. “Starbucks closing 600 stores around the world has implications for demand for the type of premium coffee that Ethiopia exports.”
Ethiopia has been suffering from a shortage of foreign currency as commodity prices have fallen worldwide and demand for its mostly agricultural exports has slipped.
DIRECT IMPACT ON EARNINGS
Prime Minister Meles Zenawi warned last month reserves stood at just $850 million versus a target of at least $1.2 billion.
The government has said it expects economic growth of 11.2 percent in 2009. The International Monetary Fund has predicted growth of 6.5 percent for Ethiopia this year.
“The global coffee market has had a direct impact on our foreign exchange earnings and our economy is having to face that at the moment,” Eleni said.
The ECX was set up to replace a murky auction system. But some Ethiopian exporters have been reluctant to sell their beans through the new exchange, which began trading coffee in December.
The government seized 17,000 tonnes of the crop in March and revoked the licences of six exporters it accused of hoarding their stocks and waiting for prices to rise.
When a state-owned body then exported the seized stock, some in the industry accused the government of nationalising its most valuable export business. The government denied that.
“It was a one-time corrective action,” Eleni said. “An attempt to send the signal that we have to keep export earnings going because the country is in a crisis.”
Exports have also been shaken by Japan’s insistence on testing Ethiopian coffee beans on arrival after it found some last year that were contaminated with pesticides. That effectively halted exports to a country that once bought about 20 percent of Ethiopia’s beans.
Ethiopia prides itself as the birthplace of coffee. Some 15 million smallholder farmers grow the crop, mostly in the forested highlands in the huge country’s west and southwest.
Tesfaye GebreAb analyzes the recent developments inside the Woyanne regime in Ethiopia, including the alleged coup plot, desperate measures against Amhara officers in the Woyanne army, Meles Zenawi’s possible retirement next year, who may take his place, etc.
Elias Kifle (center) with officials of the Ethiopan People’s Patriotic Front, Arbegna Meazaw, chairman (left), Shambel Zewdu (right), Arbegna Mengistu (sitting).
By Elias Kifle
After being buried for several years, Ethiopia’s patriots, those who speak the kind of language anti-Ethiopia forces such as Woyanne understand, are slowly waging a comeback. I have been privileged to visit some of them when I went to Eritrea this month to interview President Isaias Afwerki. Due to scheduling conflicts, I could not go to their camp in the field this time, so they drove several hundreds kilometers to meet with me in Asmara.
After spending a few minutes with these patriots, I was more inspired than ever, and left with more determination and sense of responsibility to help free Ethiopia from the Woyanne tribal mafia that is pillaging and plundering our country.
One of those patriots I met is Shambel Zewdu. He is an elected member of the federal parliament from the Gaynt Woreda of “Killil 3” (the so-called “Amhara Killil”). Following the 2005 elections, when Meles Zenawi unleashed his killers on civilians, Shambel Zewdu told then Kinijit Chairman Hailu Shawel about his intention to join resistance fighters. He said I cannot bring myself to sit down in that ‘parliament’ and allow the murderers who gunned down 12-year-olds go unpunished. He also urged Ato Hailu Shawel to leave the country and lead the struggle from exile.
Shambel Zewdu then went on a 4-month journey through northern Ethiopian jungles and mountains to arrive at the Eritrean border. When Eritrean soldiers saw him, they hugged him with tears in their eyes, gave him food, clothes, medical treatment and shelter. After he recuperated, he asked them to take him to the Ethiopian People’s Patriotic Front (EPPF) camp. They tried to talk him out of it because of his old age. But he told them that he would kill himself if they don’t take him to EPPF.
For the past 4 years, Shambel Zewdu has been with the EPPF, first as a rank-and-file member and now a member of the central committee. Two months ago, the EPPF leadership transferred him to Asmara to run the newly opened office.
EPPF has numerous genuine Ethiopian patriots such as Shambel Zewdu who refuse to betray their people and country like those who are currently sitting in the Woyanne parliament and eat crumb. Their stories have not been told so far for various reasons. Ethiopian Review is determined to change that. Ethiopia is indeed blessed with heroes. We still have them. We just need to give them the chance to shine.
Most parts of Addis Ababa are currently out of electric light three days a week, according to Ethiopian Review sources. Several business are forced to shut down their operations.
Addis Ababa is also hit with shortage of water. Tens of thousands of houses are with out tap water. People are seen carrying water jugs in the streets.
Ethiopia’s capital is run by Meles Zenawi’s puppet named Kuma Demeksa who is busy doing his own business and taking money out of the country rather than administering the city. He is too dumb to administer a city any way.
ADDIS ABABA, ETHIOPIA — Following the recent arrest of several individuals for allegedly plotting to assassinate Meles Zenawi and other {www:Woyanne} regime officials, roads to northern Ethiopia towns have been blocked and only those with identification cards can pass through the several check points.
According to Ethiopian Review sources, the Woyanne regime took this measure to catch more suspects from escaping to the country side and join the Ethiopian People’s Patriotic Front (EPPF).
In recent months, the number of Ethiopians who are joining EPPF has been increasing as the political repression in Ethiopia by the Woyanne tribal regime has intensified in preparation for next year’s general elections.
The EPPF radio, YeArbegnoch Dimts, has reported about the blocking of roads to Gondar and Gojjam in its recent broadcast, and Ethiopian Review has been able to independently verify the news.
EDITOR’S NOTE: This is a good news since the flower exporters are affiliated with the {www:Woyanne} regime, and the fertilizer they use to grow flowers for export is destroying nearby lakes and rivers.
Sabeta, Ethiopia – A local pop song trills out from the radio, filling the cavernous packing hall at the Ethio Highland Flora farm in Sabeta, a 45-minute drive from Ethiopia’s capital, Addis Ababa.
Dozens of workers tackle a seemingly endless stack of exotically named roses, separating the short stems and rotten petals from the bright Valentino, Duo Unique, Wild Calypso, and Alyssa blooms destined for Europe.
Most of the farm’s 400 employees earn less than a dollar a day, but it is a steady wage in one of the world’s poorest nations where 80 percent of the population lives off the land.
This year the 20-hectare farm, a sprawl of irrigated and temperature-controlled greenhouses, is set to beat its target for growing, cutting, and exporting 21 million stems.
That is a 15 percent rise on its contribution to the 1.5 billion stems exported by Ethiopia in 2008, earning an estimated $175 million for the industry.
But the positive figures belie a dramatic slump in demand for flowers as the global economic crisis forces European consumers, Ethiopia’s main market, to curb spending on perceived luxuries. It’s a tough blow for Ethiopia, where flower power was touted to supplant coffee as Ethiopia’s main export and highest earner of foreign exchange.
Many analysts now fear that, without swift assistance, Ethiopia’s nascent flower industry will wilt in the heat of global recession.
“We’re not talking about falling profit this year, just survival,” says farm manager Emebet Tesfaye. “Even Valentine’s Day was down from last year. The problem is Europeans don’t want flowers right now. The buyers in Amsterdam control the market, and they are setting prices very low – there is no minimum price for our stems. Every loss is on the growers’ side: transport, water, electricity, wages, and even fees to the rose breeders.”
Sales down on Valentine’s Day and ‘Mothering Sunday’
Sales forecasts are traditionally pegged to an expected bonanza at Valentine’s Day and Mothering Sunday (Europe’s version of Mother’s Day on March 22). This year Ethio Highland Flora Farm sold 20 to 30 percent fewer flowers, punching a hole in expected revenues and compounding the pain caused by low stem prices.
Prices per stem are now 10 cents (euro) or less, down 15-20 percent from last year.
On bad days, the flower auction houses of Amsterdam – where the majority of stems from Kenya, Ethiopia, Namibia, and Tanzania vie for buyers – have reported dips of up to 40 percent.
Four farms have already filed for bankruptcy – out of 85 – while at least half of the remainder are operating at a loss.
Oh, what a difference half a year makes
Just six months ago, things looked very different.
Foreign and local investors piled into the sector lured by predictions of revenues of $1 billion within five years, tax incentives, and a surfeit of cheap labor.
One thousand hectares of land went under cultivation, more than 50,000 people were directly employed on the farms, with tens of thousands earning a crust along the supply chain, as Ethiopia threatened the regional primacy of Kenya’s longer-established floriculture.
Keen to banish Ethiopia’s famine-ridden reputation, Prime Minister Meles Zenawi played his part, hailing flowers as the flagship of an increasingly buoyant economy – the government says that in 2008 gross domestic product grew at just under 10 percent.
And it is to him that the flower farmers are now turning, calling for a reprieve from the banks which are nervously eyeing their loans, and the freight firms and airlines, who currently charge $1.85 per kilo of cargo to fly the flowers to Europe.
“This is a problem caused by the developed world, but we are paying for it in Africa,” says Tsegaye Abebe, president of the Ethiopian Horticulture Producers and Exporters Association (EHPEA). “We can tolerate low market prices for a time, but if prices continue like this for many more months our industry will be under serious threat. It is time for all the businesses with a stake in the sector to help each other out.”
Despite a recent pledge to support the industry “through thick and thin,” Meles – as he is widely known – can not hold back the confluence of global and local forces sweeping across the Ethiopian flower business.
Too much power in hands of European middlemen?
It is a tough trade; cheap and high quality stems pour into the market from across Africa and Latin America, putting European buyers in the driving seat.
Prices are set low in the knowledge there is a surplus of supply from desperate growers, and farm owners have yet to build the capacity to trade directly with supermarkets – the major sale point for flowers.
As a newcomer to the market, Ethiopia does not benefit from the same economies of scale as neighboring Kenya, raising fears it is particularly vulnerable to the price shock.
Mr. Tsegaye believes survival can be secured through a diversification of products to include herbs, fruits, and vegetables, and markets to reach Japan, Middle East, Russia, and the United States. “But that depends on the short and medium term being kind to us,” he says.
The social impact of decline will also be keenly felt in Sabeta – where small holding farmers were convinced to sell their land to flower farms by the promise of big rewards to come.
The majority of flower workers are women, and the recession threatens to stymie plans to empower them with minimum labor standards and unions.
It has deflated Emebet Tesfaye’s hopes. She may soon be left with the awkward choice of dumping some of the 70,000 flowers a day produced at Ethio Highland or flooding the market with roses no one is buying.
A recent visit to a Dutch auction house intensified her gloom as she witnessed the pecking order of a market which roots flower-producing nations to the bottom.
“Each morning the buyers look at their computer screens and click one button that determines the life of all these people,” she explains gesturing to the female packers. “We have no power.”