Ethiopia revokes coffee licenses for major exporters

March 25, 2009

APA-Addis Ababa (Ethiopia) Ethiopia on Wednesday revoked the coffee export licenses for six major export companies and shut down another 88 coffee supplier unions with warehouses stocked with coffee.

The decision was made after the government accused a number of exporters and coffee suppliers of hoarding.

The Ministry of Agriculture and Rural Development also revoked the international coffee standard certification for the six companies.

“These companies cause big economic damage to the country which has resulted in the decline of the country’s coffee earnings this year,” said the ministry.

The major exporters of Ethiopian coffee affected by the decision are Mulege, S. Sara, Legesse Sherefa and Kemal Abdela.

The dispute between the government and the coffee exporters started when Ethiopia introduced last year a new electronic commodity exchange.

The Ethiopian Commodity Exchange was set up to replace a murky auction system that was often abused by market players.

Some exporters have been reluctant to sell their beans through the country’s new electronic commodity exchange which began trading in December, Prime Minister Meles Zenawi told parliament last week where he urged the exporters to immediately start selling their stocks. The ministry accused the exporters and coffee suppliers union of creating the coffee shortage in the local market, resulting in price increase in the country in the past few weeks.

Coffee accounted for about 60 percent of Ethiopia’s foreign exchange revenue in the 2007/2008 season when Ethiopia earned more than $525 million from exporting 170,888 tones of Arabica coffee.

Ethiopia, the birth place of coffee, is Africa’s biggest coffee producer.

Some 15 million smallholder farmers grow coffee in Ethiopia, mostly in the misty forested highlands of its western and southwestern regions.