Coffee, Ethiopia’s leading export earning commodity, saw its export volume and value decline during the first half of the fiscal year. This reverses a trend that has taken place over the past few years.
The Ethiopian Coffee and Tea Authority’s (ECTA) report indicated that the exported volume of coffee in the first six months of the budget year, which runs from July 8 to January 8, stood at 103,445 tons.
This is a decrease of over 28 thousand tons compared with the target. In terms of percentage the performance is about 78 percent of the target.
The report indicated that the volume has also shrunk by 4,194 tons or close to four percentage points when compared with the similar period of the 2017/18 budget year. During the stated period the authority planned for coffee exports to earn USD 475 million. Instead they only brought in 70 percent of that amount or USD 334 million.
The revenue also declined when compared with the first six months of last year by USD 49 million or 12.5 percent.
In recent history, export earnings and volume would grow every year so this is unexpected.
November is part of the bean harvest season but that month experienced the lowest performance in both value and volume.
The authority’s six-month report which was 31 pages long indicated that the value earned in August met 87.5 percent of the target. During that same month, the volume was the highest, meeting 93 percent of the target. The November performance was 62 and 51 percentage points of the target by volume and value respectively.
Saudi has stood as the top destination taking 21 percent of the total volume and 18 percent of the revenue, while Germany followed at 16 and 14 percent of the shares by volume and value in the stated six months. Japan took third place at 12 percent and the US, Belgium, South Korea, Italy, Sudan, Australia and France were four through ten respectively.
The stated ten countries consumed 84 percent of Ethiopian coffee in the past six months and contributed to 81 percent of the revenue from USD 334 million of total earnings. The report indicated that in the top ten destinations consumption has declined by four percent compared with a year ago and the revenue went down by 14 percent.
The US purchased 31 percent less coffee during this period which contributed to a decline in revenue by 29 percent.
The consumption of Germany, which is also a hub of Ethiopian coffee for the region and one of the top buyers of Ethiopian coffee, went down by 25 percent of volume and 29 percent by revenue. Volume exported to France has also declined by 18 percent which contributed to a value drop of 34 percent, while Italy’s consumption also was reduced by three percent of volume and 17 percent in value.
The consumption of the other major destinations Japan and Saudi Arabia, Sudan, Australia has increased significantly despite the revenue from Saudi declining by four percent.
Kerchanshe Trading Plc, Tracon Trading Plc and Adem Kedir Haji (Hora Trading) were the three top exporting companies respectively during the stated period. Mulege, a prominent coffee exporter, Abbahawa Trading Plc, Oromia Coffee Farmers Cooperative, Sidama, Coffee Farmers Union, Arfasa Trading, SA Bageresh, and Ethiopian Trading Business Corporate ranked four through ten respectively on the top exporter’s list. In the past six months, 278 coffee exporters were engaged in the coffee export business, according to the report.
The ten exporters exported 40 thousand tons of coffee in total and earned USD 126 million which took up 39 percent and 38 percent of the share respectively from the total export and earnings for the period, while top 20 exporters have exported and earned over half of the total trading.
The report indicated that the top 20 exporters have contributed 54 percent of the value and volume of the total coffee business.
The minority, 64 percent or 178 exporters, took only 9 percent in volume and 8 percent of value. One of the challenges coffee is facing is the growing number of new exporters, attempting to get hard currency as opposed to trading it for traditional business reasons.
The new exporters have created confusion in the coffee sector and escalated the price of the product locally while exporting it at a lower price just to get foreign currency to feed their original importing business.
The well organized report of ECTA has also compared the international coffee price with the first six months of the current budget year with the same period of the last budget year.
The table contrasts the half year monthly trading of the New York Coffee Exchange with the past budget year and it showed that the price has declined for the current budget year significantly.
For instance, in July 2017 a ton of coffee was traded at USD 4,199, while it was USD 3,664 in July 2018 which is a 16 percent decrease.
On the international market on average in the last six months the price of coffee has declined from 24 percent to 9 percent compared with the six months of the past budget year.
The authority, which also follows the spice sector also stated that in the first six months close to USD five million was secured from export which is half of the target.
The other product that ECTA follows is tea. During the stated period, 984 tons of tea was exported and earned USD 1.6 million which is about half of the target.
Coffee Break Export value, volume of Ethiopia’s cash crop declines
CCD boss given a month to hand over homes
Messele Haile (PhD), the founder of Country Club Developers (CCD), appeared before the Federal High Court’s 6th Civil Bench on January 14, 2019. He was summoned to testify in a case regarding delayed homes that the court had previously ordered be finished.
Messele told the court that he is trying his best to hand over the houses but that he needed three more months to finish installation work. Messle’s excuse for the current delay is ordering material to complete the homes from abroad as a package deal along with many other items.
Lawyers for the six plaintiffs refused the defendant’s request, stating that enough time had been given. They also demanded he be detained until he complies with the court order.
CCD was taken to the Federal High Court to execute a ruling given in their favor on January 1. In their initial agreement, the homes which lay on 1,000sqm, would be handed over within 18 months. After ten years of court battles the applicants accepted the final ruling and agreed amicably that the real estate company should deliver the houses within 16 months, granting 4 additional months for the import process. However the 16 months passed and then nine more months and still no homes appeared. So at that point the creditors applied to the court to force the execution.
CCD was also fined for failure to deliver the homes on time. They were ordered to pay 10 percent of the initial contract.
The applicants also sued for 30,000 birr for every month of delay in damages. This amounts to over one million Birr.
The judge granted just one more month for the developer to hand over the homes. The case was adjourned until February 14.
EEU launches new bill collection channel
Ethiopian Electric Utility (EEU), the state owned electric power distribution agency in Ethiopia, is set to launch a new utility bill collection system for its corporate clients.
The new payment system allows corporate clients to use a bank to pay their bills. The agency agreed with the state owned Commercial Bank of Ethiopia, to collect bills for EEU.
Sheferaw Tellila CEO of the EEU and Dereje Dufa vice president of CBE signed the agreement last Monday at the EEU headquarters.
The agency is set to sign the agreement with its corporate clients.
Currently EEU has around 27,000 corporate high voltage electricity consuming clients. That includes private, governmental and non-governmental organizations.
There are seven different types of tariffs for each usage. The lowest is 0.2 birr for each kilowatt-hour (kWh) for those that use below 50kWh a month, and the highest is 2.4 birr for each kilowatt-hour for those that use more than 500kWh a month.
The new electricity tariffs became effective on December 1, 2018, five years after that study. The rates will rise progressively toward a four-fold increase in 2022.
Consumers who use less than 50kWh a month are the only ones that will not see a rise, while the rest will be charged at a higher price based on higher rates.
The national electric utility recently adjusted the rates after 13 years of hiatus. This followed a perennial shortfall in revenues as a result of electric subsidies.
The new system is aimed at ending the time and energy the clients used to spend to pay their bills. Currently, electric and telephone bills are being collected at Lehulu payment centers in major cities across the country.
Lehulu is pioneered by Kifiya Financial Technologies, a private company established by a private-public-partnership with the former Ethiopian Ministry of Information Technology that was responsible for collecting bills through various branches.
The largest consumers of electricity, which the utility classifies as those that use more than 500KWh a month, will see their tariffs grow by more than fourfold to 2.48 Br per KW in four years.
“The Agency also has a plan to incorporate other consumers into a similar system to ease the payment channel,” Shewaferaw Tellila, CEO of EEU said.
Over 20 tons of adulterated butter, honey seized in Jimma
In Jimma over 20 tons of butter and honey contaminated with added ingredients to lessen the cost has been seized.
Ethiopia’s Health Minister, Dr. Amir Aman made the statement during testimony to parliament.
The seizure came about as part of a joint action by professionals from the newly named Food & Drug Administration Authority (FDAA), Jimma Police and city residents.
FDAA is taking steps to stop the illegal activity by providing trainings on taking various measures to control such illegal acts by giving trainings on surveillance intelligence for professionals from federal and regional states to tackle the problem.
The tainted butter and honey was discovered at Hassen Garage and Hibret School in the vicinity of Jimma City. Three people are suspected at this time.
The 21.5 tons of adulterated honey and butter is estimated to cost over two million birr, Bekalu Arega, FDAA representative in Jimma told Capital.
Other items were found during the raid as well according to Bekalu, including Vaseline, petrol products, and sugar.
Two of the suspects have been detained. Legal proceedings have been filed at Jimma City Court.
Lowering the quality of products by mixing them with other items has become a problem lately as people cut corners to get money. For example some businesspeople have been mixing Injera or red pepper with sawdust.
FDDA has the mandate to control food and medicine and enforce standards in healthcare institutions and health care professionals and control and follow up of hygiene and sanitation.
Last week, in Arada district, the Addis Ababa City Police arrested people for mixing injera with impurities like sawdust and gypsum. Over twenty barrels of adulterated dough and seven quintals of sawdust were seized during the raid.
