- East Africa
- Trade - Finance
Ethiopian government to return coffee hoarders’ money?
The 6 major exporters had hoarded 18,000 tonnes of coffee
The Ethiopian Government has moved to clear bank credits of six banned coffee exporters who had borrowed money for the purchase of 18,000 tonnes of export coffee at the Ethiopian Commodity Exchange trading floor.
In March, the Government seized 18,000 tonnes of coffee and revoked the licences of six export companies and 88 domestic coffee suppliers, accusing them of hoarding stocks.
The Government then sold the coffee at the exchange market through selected intermediary members. The state-owned Ethiopian Grain Trade Enterprise, (EGTE) which is a member of the Ethiopian Commodity Exchange (ECX), bought the coffee stockpiled at the ECX store.
Four of the six exporters threatened to sue the Ministry of Agriculture and Rural Development (MoARD) over their seized coffee.
Subsequently, the Government, a couple of weeks ago, announced that it will return the money earned from the seized coffee to the exporters.
One of the six exporters said that they are happy with the current conditions the Government is offering. The same exporter also said that the six exporters are discussing the possibility of a pardon with the Government.
Mulege Private Limited Company, S. Sara Coffee Export, Legesse Sherefa Private Limited Company, Hajji Kemal Abdella International Private Limited Company, Seid Yasin Ali Coffee Export and Ersede Private Limited Company are the six companies involved.
Some of those exporters also claimed that the seized coffee has been sold below the price it should have fetched. According to the exporters, the value and quality of their coffee was high, but the selected intermediary sold the beans as a standard product for the local market.
Tarkegne Tsgie, public relations head with MoARD, said that the coffee had been sold at the market price and through the exchange. He stressed that the claim regarding the price is baseless, as the ministry was bound by the international market price.
Tarkegne said that international buyers and giant coffee roasters who have contracts discussed the issue of coffee supply with the Government, who responded positively to the problem. He said that it is solved and the export of coffee is going to resume as usual.
Ethiopia earned only 277 million dollars from the export of 98,000 tons of coffee during the past 10 months, which is approximately half the targeted amount.
The six exporters were the major coffee exporters, accounting for 90 per cent of total export of the product.
Ethiopia only sold 76,674 tonnes of coffee worth 221.7 million dollars from July-February 2008/09, well below planned exports of 126,721 tonnes worth 446.7 million dollars.
Coffee accounted for about 60 per cent of Ethiopia’s foreign exchange revenue in the 2007/2008 (June/July) season, when it earned more than 525 million dollars from exports of 170,888 tonnes of mostly high quality Arabica beans.