Ethiopia is experiencing a significant increase in coffee prices, a staple commodity that has traditionally been used for domestic consumption. Recent economic reforms have contributed to this dramatic rise, with prices now exceeding 300 birr per kilogram in the market.
According to reports, the price of coffee has nearly doubled, rising from 57 birr to approximately 120 birr per kilogram. This increase is attributed to various factors, including changes in export dynamics and the profitability of coffee production for exporters. Previously, many exporters hesitated to sell coffee domestically due to the higher profits available from international markets.
Cheru Koru, Head of Market Intelligence and Security at the Ethiopian Coffee and Tea Authority, explained that there are different quality levels of coffee, ranging from one to five. He noted that coffee previously sold as a by-product within the country is now being prepared for export at higher quality levels, further impacting local availability.
As one of the largest exporters of coffee in Africa, Ethiopia’s export increases have led to a shortage of coffee available for domestic consumption. Koru emphasized that when exports rise, it often results in reduced supply for local markets, driving up prices for consumers.
The government is actively working to enhance coffee production and expand market access for Ethiopian coffee globally. This year alone, Ethiopia’s exports of specialty coffee have increased from 20% to 45%, reflecting a growing demand for its high-quality products on the international stage.
The sharp rise in coffee prices has raised concerns among consumers and local businesses alike. Many are worried about the impact on their daily lives as coffee is an integral part of Ethiopian culture and social gatherings.
In response to these challenges, the Ethiopian government is exploring strategies to stabilize prices and ensure that local consumers have access to affordable coffee. This includes potential measures to regulate exports while promoting domestic consumption.
