From ICO

1. Ethiopian Coffee:
Challenges and Opportunities
Ethiopian Coffee Export Conference
8 – 9 November 2012
Addis Ababa, Ethiopia
Addis Ababa Ethiopia
José D. Sette
International Coffee Organization Head of Operations
SUMMARY
1. Key demand trends
2. Key consumption trends
3. Challenges to the coffee sector in Ethiopia
4. Opportunities for the coffee sector in
Ethiopia
International Coffee Organization
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2. World coffee production
Crop years 1980/81 – 2012/13*
160
140
120
Million bags
100
80
60
40
20
0
* Provisional
International Coffee Organization
Share of Robusta (%) in World Production
Crop years 1980/81 – 2012/13*
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
* Provisional
International Coffee Organization
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3. Production in Africa
Crop years 1980/81 to 2011/12
25
20
15
Million bags
10
5
0
Ethiopia Africa
International Coffee Organization
% share of Africa & Ethiopia in world production
Coffee years 1980/81 to 2011/12
25%
20%
15%
10%
5%
0%
Ethiopia Other Africa
International Coffee Organization
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4. Africa: Coffee Production
(Averages in thousand bags)
1980‐89 1990‐99 2000‐09 2010‐12
TOTAL AFRICA 19 888 16 078 15 372 15 712
Ethiopia 3 128 2 973 4 904 6 450
Uganda 2 724 2 811 2 924 3 002
Côte d'Ivoire 4 338 3 448 2 692 1 291
Cameroon 1 771 1 022 821 845
Tanzania 875 779 796 686
Congo, D.R. 1 610 1 019 383 681
Kenya 1 726 1 377 766 669
Madagascar 1 092 780 490 566
Others 2 625 1 868 1 597 1 522
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Africa: Coffee Exports
(Averages in thousand bags)
1980‐89 1990‐99 2000‐09 2010‐12
TOTAL AFRICA 16 664 14 636 11 546 10 676
Uganda 2 448 3 002 2 769 2 939
Ethiopia 1 370 1 481 2 368 2 927
Côte d'Ivoire 3 806 3 823 2 393 1 311
Tanzania 851 783 766 709
Kenya 1 631 1 363 747 661
Cameroon 1 643
1 643 1 050
1 050 741 515
Guinea 59 123 344 373
Burundi 508 483 321 304
Rwanda 594 336 303 254
Others 3 755 2 193 793 683
International Coffee Organization
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5. World Coffee Consumption
2001 – 2011
(In thousand bags)
Absolute Average annual
2001 2011 % change
change growth rate
growth rate
WORLD TOTAL 109 581 139 000 26.8% 29 419 2.4%
Exporting countries 27 799 42 435 52.6% 14 636 4.3%
Traditional markets 64 300 70 799 10.1% 6 499 1.0%
Emerging markets 17 482 25 766 47.4% 8 285 4.0%
International Coffee Organization
Key Trends: Traditional Markets
 Quality: specialty coffee “revolution”
 Innovation: single‐serve machines; RTD etc.
I i i l hi RTD
 Sustainability: certification/verification
 Fairtrade / Rainforest Alliance / Utz Certified /
4Cs / organic / others
 Strong competition from other beverages (water
f h b (
juices, tea, energy drinks etc.)
International Coffee Organization
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6. Key Trends: Emerging Markets &
Producing Countries
 Rising income levels
 Aspirational values
A i ti l l
 Large populations
 Affordability
 Soluble
 “3 in 1”
3‐in‐1
 Marketing
 Generic promotion
 Coffee and health
International Coffee Organization
World Consumption Outlook
(1970 to 2020)
180 173.6
166.1
160 158.9
140
2000‐2011
120 2.5%
1990‐1999
Million bags
100 1980‐1989 1.8%
1970‐1979 1.7%
1.3%
80
60
40
20
0
Actual Low ‐ 1.5% Medium ‐ 2.0% High ‐ 2.5%
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7. Challenges (1)
1. Structural challenges:
 p ( y p y);
Lack of competitiveness (low yields & productivity);
 Poor access to market & long supply chain;
 Lack of infrastructure;
 Inadequate access to services (particularly financial
services, risk management etc.);
 Low value addition; and
Low value addition; and
 Inadequate technology transfer & research (coffee
genome, conservation, biodiversity etc.).
International Coffee Organization
Challenges (2)
2. Policy environment:
 Low levels of public investment in agriculture;
 Disengagement of the state in production &
marketing activities;
 Liberalisation/agricultural reforms historically
poorly executed; and
l t d d
 Weak institutional framework in many
countries.
International Coffee Organization
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8. Challenges (3)
3. Sustainability:
 Adaptation and mitigation to climate change
(and other adverse weather events)
 Conservation of biodiversity
 Social sustainability: empower women and
attract youth
tt t th
 Competition for land (subsistence farming,
biofuels)
International Coffee Organization
Price paid to growers as % of export value
Calendar years 2000 ‐ 2011
100%
80%
60%
40%
20%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Ethiopia Uganda (Arabica) Costa Rica Guatemala
International Coffee Organization
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9. Opportunities (1)
The Ethiopian coffee sector has bright
p p
prospects:
 The country has suitable altitude, ample
rainfall, optimum temperatures, appropriate
planting materials, low labour costs and
fertile soil.
 The country can sustainably produce and
supply fine specialty coffee, with potential
of producing all coffee types of the various
world coffee growing origins.
International Coffee Organization
Opportunities (2)
Grounds for optimism:
 Strong potential to increase supply
Strong potential to increase supply
capacity/yields (transfer of technology)
 Promote value addition
 Differentiation through brand awareness (e.g.
Yirgacheffe, Sidamo etc.)
 Importance of traceability
International Coffee Organization
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10. Opportunities (3)
Create an enabling policy environment:
 Support agricultural research and
Support agricultural research and
development
 Improve access to price risk management
tools
 Sustainable development
p
 Promote a strong institutional framework to
better coordinate policy
 Macroeconomic policy
International Coffee Organization
Exchange rate of Ethiopian birr to US$
Monthly averages 2000 ‐ 2012
0.14
0.13
0.12
Ethiopian Birr/US Dollar
0.11
0.10
0.09
0.08
0.07
0.06
0.05
0.04
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
International Coffee Organization
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11. Opportunities (4)
Stimulate local consumption:
 Ethiopia is not only the birthplace, an
important producer, and a leading exporter of
Arabica coffee, but also a heavy consumer.
 Ethiopians are the highest coffee consumers in
Africa.
Africa
 Coffee is strongly ingrained in Ethiopian
culture (“coffee ceremony”).
International Coffee Organization
Thank you
Thank you
www.ico.org
g
Robério Oliveira Silva
Executive Director
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