ADDIS ABABA (Reuters) – Ethiopia’s dictator 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.
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FORUM | 3 Comments
The development state strategy or master plan….Beg from the reach country if they do not offer you, confiscate the poor people you used to beg on their name.
Confiscation is what the communist government does. Imagine a government who claims to be a democrat is warning to take away private wealth of individual from their storage and sell it as it wishes. Laughable as it always is.
I do not understand why the chimpanzee prime minister out rightly declare himself as he is the king of kings or the communist leader
[Reply]
March 19th, 2009 at 4:30 PM
I am surprised he has not yet confiscated the wealth of the coffee producers. Woyanne will take anything it sees, for it believes the country wealth belongs to it. EFFORT is taking everything it gets its hands on, thanks to TPLF-Woyanne it has the monopoly protection as well as the currency that is coming to the country.
[Reply]
March 19th, 2009 at 7:11 PM
Whose fault is the reduction in coffee export? The demostic inflation is sky rocketing and the purchase price of coffee shooting local. However the international market is stagnating or declining. So, Who would be willing to make a loss. Before talking about cutting off hands, our thugish leader should rectify our monetary policy. Uncontrolled money supply, government borrowings and doners grant pushed our currency to the corner of collapsing. By simple observation the acceleration of our money supply in the last few years(Look the website of NBE) any one could witness how our government is printing money. The high level of inflation and the depletion of foreign currency reserves is the begining of Meles’s economic policy lunacy. There are a lot to come. God forgive us.
[Reply]
March 20th, 2009 at 11:26 AM