Ethiopia At-A-Glance:
Production: Avg ~7.5m bags of coffee per year, last 10 years
Coffee Types: Arabica (Natural & Washed)
Coffee Harvest:
Oct-Jan: Most of the crop
Feb-Apr: Lekempti region (~10% share)
Key regions: Yirgacheffe, Limu, Guji, Sidama, Djjimma, Lekempti and Harrar
Other Key Facts:
Avg Farm Size: Less than 2 hectares
Smallholder predominance: 70% of crop grown in 1 hec farms
Why Ethiopia Matters Ethiopia is the world's third-largest Arabica grower and Africa's top coffee producer. The country’s naturally processed coffee production is second place in the world next to Brazil. Additionally, Ethiopia’s microclimates provide unique flavor profiles and are highly sought after for specialty and commercial coffees. For these reasons, it is one of the key origins in the Arabica supply chain.
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Ethiopia’s harvest calendar alternates with Brazil, meaning their harvests take place consecutively, which contributes to providing more stability in the supply of Naturals. Moreover, as Africa's largest Arabica producing origin, Ethiopia’s production and weather requires a thorough analysis to grasp its position in the larger context of global coffee production.
Ultimately, the country has a strong influence in the physical pricing for naturals across the global market, and so it’s of major relevance for buyers of these coffees. In this article, we will explore Ethiopia’s role as a coffee origin, its production and consumption development history, was well as challenges and perspectives.
Crop Overview
Coffee growing in Ethiopia can be divided into three main types of production systems. Forest coffees, Garden coffees, and Plantation coffees.
The first two account for 93% of total production and are typically grown by small-hold farmers. Forest coffee is grown under the shade of thick forests and semi forests, while Garden coffees are typically grown around homesteads or other dwellings.
Plantation coffees are grown intensively in large farms where standard agricultural practices are used as well as fertilizers, but only represent a small 7% of total crop
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Know Your History (of Production)
Ethiopia is often thought of as the birthplace of coffee but interest in Ethiopian Coffee picked up in the 1800s due to the favorable climate and proximity to Europe. Today, Ethiopia holds the top place as the largest Arabica producer in Africa, and the second largest provider of naturals outside of Brazil.
However, beyond a favorable climate, the political history of Ethiopia played a pivotal role in fostering the growth of coffee production there.
During most of the 20th century, land owning in Ethiopia was concentrated in the hands of few, and this significantly constrained production. However, between the 1970’s and early 1990s, the downfall of Emperor Haile Selassie and the power takeover by Ethiopian People's Revolutionary Democratic Front resulted in a major process of land redistribution.
This land redistribution was responsible for triplicating Ethiopia’s production in the 30 years that followed. Primarily because it ultimately enabled land to access to the small farmers, which are the ones who sustain Ethiopia’s coffee industry.
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However, despite the political kick-off from the early 90s, it was only in the early 2000s that Ethiopia’s production started finding the stimulus for a significant and consistent increase. During this time span, production increased from a yearly 2-3m bags to the current 6-7m bags range.
The main contributing factor was a series of government programs to promote price stability and encourage production as coffee exports are considered a valuable source of foreign exchange.
To that end, the waving of coffee export taxes in 2002 played a vital role, as it contributed to increasing the prices paid to growers.
Unfortunately, in both human and coffee terms, civil war broke out in 2020 which led to international sanctions that disrupted the flow of currency into Ethiopia. This led to the government enacting stricter currency controls that hampered the export of coffee and going forward may limit production growth.
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Because of the costs placed on farmers and exporters due to currency controls, the official production statistics and exports are around 6 million bags, while unofficially the production numbers are thought to be 2 million bags higher with much of it being smuggled out.
Additionally, rising inflation has contributed to higher costs to farmers which, combined with the political aspect, is stymying interest in coffee production. Consequently, while the government has been a large champion of production growth in the past, ironically, it’s now the primary limiting factor.
Coming Soon – Part 2 – Production Regions of Ethiopia
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