The Ministry of Trade (MoT) plans to earn USD 2.51 billion or 16.6 percent more than they targeted last fiscal year, from exporting non-manufactured or agricultural products.
The office’s biggest target item is no surprise as they plan to rake in USD 862.5 million from coffee, the item that has been historically the nation’s highest foreign currency earner. This year plans are for coffee to bring in a whopping 20 percent more than last year’s earnings.
A document released by the ministry forecasts that the nation will export 235,950 tons of coffee during the 2014/15 budget year, a significant increase from 190,876 tons during the 2013/14 fiscal year. The current year’s target has a 23.6 percent higher volume compared with the previous year. In the past budget year the country generated USD 718.8 million from coffee exports.
During the previous fiscal year Ethiopian coffee growers and exporters suffered at the hands of the international coffee market as prices plummeted. However this year coffee prices are expected to increase as other countries that export coffee have suffered from crop damage and their production may decrease. Despite the fact that MoT has set a higher target for coffee this fiscal year it is still less than the GTP target that was set about four years ago. This is largely because during the past four years, coffee did not bring in as much revenue as the GTP predicted it would. The plans of the GTP called for revenue from coffee to be over USD two billion by the end of the plan, which is this fiscal year. It targeted for coffee’s export volume to be 600,970 tons for the current fiscal year. The goal for the past year of the GTP was to be USD1.6 billion with a volume of 468,052 tons.
The lower than expected results are largely being blamed on the international market.
Coffee is now forecasted to earn nearly USD 4,268.68 per ton this fiscal year whereas last fiscal year it earned an average of around USD 3,765.75 per ton.
One thing the government wants to do to improve results is to establish a strong institution to fully follow the harvest (plantation), marketing and exporting of coffee beans with the goal of getting more from coffee. The office would be at the ministerial level and would exclusively follow coffee. Currently, different offices like the MoT and Ministry of Agriculture are responsible for coffee.
Experts said that this should help coffee earn more.
“For instance very few individuals are responsible for the coffee sector at MoT,” the expert said. Even though the Ethiopian coffee has a high premium compared with international brands, it is still not gaining its value.
The other major sector that MoT is looking after is the export of oil seeds. During the current budget year the ministry has targeted to expand the export earnings by 12.77 percent compared with the past fiscal year’s achievement. During the current year USD 725 million is expected to be earned, an increase from USD643 million during the 2013/14 budget year. The GTP target indicated that the revenue from oil seeds should be USD 1.12 billion.
Despite the fact that some have mixed feelings about khat, the stimulant leaf brings in a lot of hard currency. According to the ministry’s target, khat should generate USD 332 million through 60,435 tons of exports. Khat is the third highest earning export crop and in the past fiscal year its 52 thousand tons export brought in USD 297 million to the country. The export of pulses for the current year will be USD 307 million with the export of 409,287 tons of the crop. The projection is a 22 percent higher value and 16 percent higher volume compared with the past fiscal year.
From livestock exports the country expects to earn USD 222 million from 808,747 live animals. In the 2013/14 fiscal year the country earned USD 187 million from exporting 647,713 animals, mainly cattle, sheep and goats.
According to the GTP Matrix, the government had projected to earn USD 4.04 billion from exporting coffee, oilseeds and pulses in the 2014/15 budget year. But according to the latest plan the ministry office plans to earn half of the original GTP target which is USD 1.9 billion.
The other sectors that MoI follows are cereal, natural gum, tea and spices. From these items the ministry has targeted to earn USD 58 million in the current budget year.
This is the final year of the five year Growth and Transformation Plan (GTP).