From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Thu Mar 19 2009 - 11:47:41 EST
Ethiopia threatens to sell exporters' coffee stocks
Thu Mar 19, 2009 2:40pm GMT
By Tsegaye Tadesse
ADDIS ABABA (Reuters) - Ethiopian Prime Minister Meles Zenawi threatened on
Thursday to seize and sell coffee stocks being held by exporters who he
accuses of hoarding.
Some exporters have been reluctant to sell their beans through the country's
new electronic commodity exchange, which began trading coffee in December,
Meles told parliament.
"As a result, coffee export are significantly lower this year," he said.
"The government may be forced to take over stocks held in private warehouses
and provide it to the market."
Ethiopia prides itself as the birthplace of coffee. Some 15 million
smallholder farmers grow the beans, mostly in the misty forested highlands
of its western and southwestern regions.
The country is Africa's biggest coffee producer.
The Ethiopian Commodity Exchange (ECX) was set up to replace a murky auction
system that was often abused by market players.
In January, Meles issued a stern warning to exporters, threatening to "cut
off their hands" if they did not sell stocks they were holding in the hope
of better prices.
Coffee accounted for about 60 percent of the Horn of Africa nation's foreign
exchange revenue in the 2007/2008 (June/July) season, when it earned more
than $525 million from exports of 170,888 tonnes of mostly high quality
arabica beans.
In parliament on Thursday, Meles warned that the prices of other important
Ethiopian export commodities -- including sesame seeds and leather goods --
had also fallen sharply in recent months.
He said the country's foreign exchange reserves now stood at $850 million
compared with a target of at least $1.2 billion. He said another reason for
the reduction was increasing demand for hard currency to import goods like
cement, steel and machinery.
C Thomson Reuters 2009 All rights reserved
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