ADDIS ABABA (Reuters) – Ethiopia's dictator Meles Zenawi ordered the confiscation of 17,000 tonnes of coffee from exporters on Wednesday and revoked the licenses of six companies accused of hoarding their stocks.

"They refused to comply with government orders to export the beans," Agriculture Minister Tefera Derebew told Reuters.

"It was time for the government to take action."

Tefera said the licenses of 88 independent traders had also been canceled for failing to heed the authorities.

Ethiopia, Africa's biggest coffee producer, prides itself as the birthplace of the bean.

Some 15 million smallholder farmers grow coffee, mostly in the misty forested highlands of its west and southwest regions.

But some exporters have been reluctant to sell stocks through the new electronic Ethiopian Commodity Exchange (ECX), which was set up to replace a murky auction system often abused by market players. The ECX began trading coffee in December.

In January, Prime Minister Meles Zenawi warned 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 hard currency 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.

Tefera, the agriculture minister, accused some export firms of selling coffee meant for export on the domestic market.

"It is a serious offense," he said, adding the seized stocks would now be offered on the international market.

"Whether the money generated through the sales will be given back to the traders will be decided in the courts," Tefera said.

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