ADDIS ABABA (Reuters) – Ethiopia’s dictator Meles Zenawi threatened on Thursday to seize and sell coffee stocks being held by exporters who he accuses of hoarding.
Some exporters have been reluctant to sell their beans through the country’s new electronic commodity exchange, which began trading coffee in December, Meles told parliament.
“As a result, coffee export are significantly lower this year,” he said. “The government may be forced to take over stocks held in private warehouses and provide it to the market.”
Ethiopia prides itself as the birthplace of coffee. Some 15 million smallholder farmers grow the beans, mostly in the misty forested highlands of its western and southwestern regions.
The country is Africa’s biggest coffee producer.
The Ethiopian Commodity Exchange (ECX) was set up to replace a murky auction system that was often abused by market players.
In January, Meles issued a stern warning to exporters, threatening to “cut off their hands” if they did not sell stocks they were holding in the hope of better prices.
Coffee accounted for about 60 percent of the Horn of Africa nation’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.
In parliament on Thursday, Meles warned that the prices of other important Ethiopian export commodities — including sesame seeds and leather goods — had also fallen sharply in recent months.
He said the country’s foreign exchange reserves now stood at $850 million compared with a target of at least $1.2 billion. He said another reason for the reduction was increasing demand for hard currency to import goods like cement, steel and machinery.