Ethiopian Review

Addis Ababa — The Ministry of Agriculture and Rural Development has paid off the loans taken out by six banned coffee exporters.

The re-payment of loans comes after the ministry exported beans seized off the major exporters, who were alleged to have been hoarding the commodity, through the Ethiopian Grain Trade Enterprise and other private exporters.

Three weeks ago, MoARD called the exporters and suppliers to confirm their bank account numbers for the transfer of the money, after it decided to clear bank loans that were taken to buy about 18, 000 tons of the subsequently confiscated beans from the Ethiopian Commodity Exchange (ECX) and other local markets.

In March this year, after the Government made the hoarding accusation, it seized and sold the coffee at the exchange market through selected intermediary members.

The state-owned member of ECX, the Ethiopian Grain Trade Enterprise began to participate in coffee trading weeks before the seizure and has bought the major share of the seized product after finding markets in Europe, North America and Japan.

Recently, some of the exporters claimed that the seized coffee has been sold below the price it should have fetched. The exporters told Capital 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, recently responded 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.

Some of the exporters and suppliers told Capital they have not yet received the money into their account.

The Government has also promised that it will return the money earned from the seized coffee to the exporters. The six exporters had been responsible for over 80 per cent of the country total coffee exporst. For instance Muluge PLC, one on of the rejected exporters, had the majority share of the total exports and it was exporting to Starbucks, one of the largest coffee firms in the world.

The banned firms are 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.

The Government gave four reasons why it took the action against them: They have hoarded last year’s coffee products instead of exporting to the global market before this year’s crop season; they have hoarded coffee by-products instead of supplying to local markets; they were found by the ministry’s inspectors during an inventory to be hiding a substantial volume of standard coffee they bought last year from an auction centre; and the exporters were also found to have failed to export sufficient quantities of coffee to honour an agreement with the Commercial Bank of Ethiopia.

MoARD suspended their coffee quality certificates and export licenses; and shut stores where export coffee and byproducts were stored.

Coffee accounted for about 60 per cent of Ethiopia’s foreign exchange revenue in the 2007/08 season, when it earned more than 525 million dollars from exports of 170,888 tonnes of mostly high quality Arabica beans. However, the export volume has declined by 40 per cent on this year.

- By Muluken Yewondwossen | Capital Ethiopia