Ethiopia will not indulge in cross border wheat supply despite great successes registered in recent harvest seasons, Capital has learned.
Earlier in the beginning of the harvest season, the government had disclosed that it will commence export of wheat, with the sector experts signaling that it would take a considerable amount of time before the grain is shipped across the country’s borders.
The wheat production success in recent periods has been attributed to the use of off season harvest and cultivation of the grain in new areas that previously did not produce wheat.
Thus far, the government through the Ethiopian Trading Businesses Corporation (ETBC), a public enterprise that was importing wheat to stabilize the market, has sold the grain to the World Bank and World Food Programme.
Recently Legesse Tulu, Minister for Government Communication Service, disclosed that the World Bank bought 127,000 metric tons of wheat from Ethiopia while the UN agency bought 35,000 tons of wheat.
According to sector experts and exporters who are looking to start supply for their buyers, except the stated volume of the product, the government has not made available any additional grain.
Recently Eyob Tekalign, State Minister of Finance, said that the export was done via ETBC, which bought the product from farmers. This was done in close followed up by the Ministry of Finance (MoF) and a team organized under the National Macro Economy Committee.
“It will not be continuing like this. The team and MoF followed the case diligently because it was a new scheme but in the future, the commodity shall be sold through the Ethiopian Commodity Exchange (ECX) or directly from farmers to exporters,” he added.
ECX had announced that it is under preparation to commence wheat trade under its electronic floor.
The trading floor also expressed that it does not have any expectation of the product to be out for export in the coming months. According to the information that Capital obtained, the wheat that was sold to the two organizations was supplied for local aid only.
“As far as my knowledge, the product has not crossed the border,” opined one of the exporters that Capital spoke to with regards to the export of the new emerging agricultural commodity.
Different reports indicated that overall, Ethiopia boosted its total wheat production from 6.86 million tonnes in 2020/21 to 8.2 million tonnes in 2021/2022. Effort is also said to be well underway to produce over 52 million quintals of wheat with irrigation by July, 2023.
As a result, Ethiopia has not imported commercial wheat as from last year. The country previously had allocated up to USD one billion for wheat import, while the effort taken in the past three years has reduced the import volume.
Wheat production focus shifts to local use
Ethiopia’s coffee production soars despite global reduction
Ethiopia’s coffee output increase despite global production shriveling by 1.4 percent in the 2021/22 coffee year.
The International Coffee Organization (ICO) Coffee report and outlook (CRO) 2023 which was issued last week indicated that the world’s coffee production stood at 168.5 million bags (a bag is equivalent to 60kg) with a reduction of 1.4 percent in contrast to the production season of 2020/21.
When this trickled down to Ethiopia, the report stated that despite global production showing a reduction in the 2021/22 coffee year, the ancestral coffee roots of Ethiopia gained increments of 3.6 percent compared with the preceding year.
The ICO report read that Ethiopia is benefitting from a national programme which was started in 2010 that aims to increase productivity through improved farming practices and technological adaptations, with subsidized seedlings and assistance with replanting existing plots with higher plant density.
Through the programme, the replanted coffee trees are now being harvested, and coupled with favorable weather conditions this has led to production increase to 7.9 million bags for the 2021/22 coffee year from 7.6 million bags in the previous season.
Increasing area under coffee and adoption of good agricultural practice are said to be the main reasons behind the positive growth. It is also said that in the five years leading to 2020, the area harvested had increased by 22.3 percent or 156,117 hectares, and according to official government figures, “Techno Serve, a non-profit organization, has been in the country since 2012 running the ‘Coffee Farm College’, teaching farmers how to increase productivity. In 10 years, the Coffee Farm College has trained around 200,000 farmers.”
Currently, Ethiopia ranks in third place for the Arabica coffee production after Brazil and Colombia.
The CRO cited that the reduction has been hampered by the off biennial production and negative meteorological conditions in a number of key origins, “However, it is expected to bounce bank by 1.7 percent to 171.3 million bags in the 2022/23.”
Even though the production shows reduction the demand for coffee has continued on its increment according to the ICO annual report. The CRO shows that world coffee consumption increased by 4.2 percent to 175.6 million bags in coffee year 2021/22, following a 0.6 percent rise in the previous year. “Release of the pent-up demand built-up during the COVID-19 years and sharp global economic growth, increasing 6.0 percent in 2021, explains the sharp bounce back in coffee consumption in coffee year 2021/22,” it added.
However, it stated that the global economic condition would affect the coffee consumption in the past and current year.
“Decelerating world economic growth rates for 2022 and 2023, coupled with the sharply increasing cost of living, would have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7 percent to 178.5 million bags,” the ICO report reads.
As a result, the world coffee market is expected to run another year of deficit, according to the report.
Global economic impact and weather are stated as a challenge for the sector development in the future.
Increased global fertilizer costs and adverse weather conditions are expected to partially offset the positive impact of the on biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23,” the report explained.
The impact of the biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6 percent to 98.6 million bags in coffee year 2022/23, following a 7.2 percent decrease in the previous coffee year. Reflecting the cyclicality of Arabica’s output, its share of the total production is expected to increase to 57.5 percent from 55.9 in coffee year 2021/22.
Different analysis indicated that global coffee price will suffer in the coming months due to different factors unlike the past year.
Stay Easy Plus Hotel glitters for hospitality exploration
Stay Easy Plus Hotel, a local five star hotel built at a cost of 1.5 billion birr, joins the budding hospitality industry at the heart of the capital. The new hotel, which is expected to open its doors in the coming two weeks, is located around Semen Hotel.
The pristine hotel which took about eight years to complete has eight floors, with the building spread across a footprint of 2,250 square metres of land, 1,700 of which was dedicated to the construction of the building. The hotel has six halls which have capacity to accommodate banquets, weddings, exhibits of fine and performing arts, and other events for 15 to 1,500 guests. In addition, the five-star hotel spots 103 rooms, which include two suites, nine twins, six deluxe, and six family rooms, three bars and a restaurant.
“Since our hotel is located in a ten minute drive from Piazza’s central business sector in a quiet, open neighborhood, it will be the first choice for guests especially travelers coming from Entoto Park and Botanic Garden, as well as for athletes practicing in Entoto and Sululta,” said Hiwot Ayele, Managing Director and joint owner of the hotel with her husband, adding that, “The rooms have a panoramic view of the entire city of Addis Ababa in all four directions.”
So far the hotel has created job opportunity for more than 250 locals. As Hiwot said, the hotel is well established to give all kinds of services including a charging station for guests who bring electric vehicles and the soon-to-be-finished expansion project will include a sports gym, sauna, steam room, swimming pool, cultural café, and concert hall.
“Besides doing business, we have been trying to significantly contribute to serving the neighborhood .Since the beginning of the construction phase the hotel has served meals to the elderly and others in need during holidays as part of its social responsibility. The hotel’s groundwater supplies free water to the surrounding community for a full day,” Hiwot stated whilst highlight the social impact that the hotel had done prior to its inauguration.
Ethiopian Airlines hopeful to get shares of Nigeria Air as it sets to start operation in May
The biggest airline in Africa, Ethiopian Airlines, expects to get the promising Nigeria Air share in the coming three weeks, the airlines CEO reveals.
After being awarded by the government of Nigeria last year, Ethiopian Airlines has started discussions to set up a Nigerian flag carrier which was founded in 1958 and ceased operation in 2003. The two have agreed on almost all terms and have made significant progress in setting up the new national airline.
However, the process is facing a hurdle in the form of a court case which is delaying the introduction of Nigeria Air into commercial service.
“We expect the court case will be closed in the coming three weeks which will make us to complete the process and establish the airline,” said Mesfin Tasew, CEO of Ethiopian Airlines, adding, “Ethiopian airlines is ready to begin its operation as soon as the court case issues solved.”
The ownership structure of Nigeria Air consists of Ethiopian Airlines as a majority shareholder with a 49% stake, while Nigerian entrepreneurs and companies, namely MRS, SAHCO and the Nigerian Sovereign Fund hold a 46% stake. The remaining 5% stake is held by the Nigerian Federal government.
According to reports, Nigeria Air would have an initial capital of $300 million and plans to have 30 aircraft within four years.
The CEO also stated that Ethiopian Airlines is committed to expanding its operations in Nigeria and providing quality services to its customers. Additionally, the airline plans to increase the frequency of its flights to Lagos and Abuja.
Nigerian airlines composing the Airlines of Nigeria (AON) are pushing back against the large stake that Ethiopian Airlines will hold in Nigeria’s new flagship carrier Nigeria Air. The AON believes the Nigerian flagship carrier should be wholly owned and operated by Nigerian nationals and took the case to Court
The suit, filed on November 11, 2022, opposed the proposed partnership between Ethiopian Airlines and the Federal government of Nigeria, where ET became a majority shareholder in Nigeria Air with a 49% stake after being selected as the preferred bidder to establish the airline.
The court case hindering Nigeria Air’s start involves a group of smaller Nigerian airlines that filed a suit, resulting in a temporary order to suspend the establishment of Nigeria Air.
Once the case is finalized, the CEO also stated that the airline is planning to expand its routes to other African countries and increase its fleet size to meet the growing demand for air travel in the region “We are also completing the process to get 49 percent of air Congo,” he told Capital.
Additionally, Ethiopian airlines owns stakes in several other airlines, including 45% in Zambia Airways, 49% in Guinea Airways, 100% in Ethiopia-Mozambique Airlines, 49% in Chad Airlines, and 49% in Air Malawi.
Ethiopian Airlines has been working with the government of Nigeria for nearly five years to establish a flag carrier for the West African nation.
