Global coffee prices have plunged due to better harvests and higher supply from Brazil and other South American producers, putting Ethiopia’s key export sector under severe pressure. Export prices dropped by 30% in just two months, with further declines of around 10% expected.
Despite falling export earnings, domestic coffee prices in Ethiopia have tripled over the past six months, creating a sharp paradox for local consumers. Low foreign exchange reserves have forced legislation requiring farmers to export high-quality beans, reducing domestic supply and driving up local costs.
A family-run coffee farm in the southern Ethiopian highlands, known for grade one beans, highlighted the challenges. Farmers in areas like Galum depend heavily on coffee for their livelihoods and are now increasing production volumes to cope with lower prices.
One cafe patron noted the cultural importance of coffee, saying patrons continue to visit despite higher prices as “coffee is very important in our culture. We don’t just drink one cup a day. We have many.”
Coffee accounts for 30% of Ethiopia’s exports and nearly half of the country’s foreign exchange earnings. Experts advise against hoarding beans due to the commodity’s volatility and potential quality degradation over time.
