Drop in Ethiopia’s global premium coffee market share needs attention: IGC report

Drop in Ethiopia’s global premium coffee market share needs attention: IGC report

A new report urges Ethiopia to capitalize on regaining its share in premium coffee markets and maintain a policy focus on value addition as the country’s share of organic coffee trade in the international market slides down.

Titled ‘Climate change and coffee in Ethiopia,’ the research study was one in a series conducted by the International Growth Center (IGC-Ethiopia) and presented to officials at the Ministry of Planning and Development on January 12, 2024.

The study highlights Ethiopia’s inability to focus on value addition in organic washed and specialty coffee in its export trade has a cost, and a growing market shift towards buyers in the Middle East rather than higher premium destinations such as Europe, the US, and Japan.

Seneshaw Tamru is the senior economist behind the research at IGC-Ethiopia. He explains that while organic coffee can fetch premiums of up to 26 percent above market rates, Ethiopia’s market share has declined to four percent.

“We say almost all of the coffee we export is organic, but Ethiopia’s share is declining,” said Seneshaw. 

The latest annual report from the United States Department of Agriculture (USDA) Foreign Agricultural Service reveals that while Ethiopia’s coffee production has grown slightly to 496,000 tonnes from 489,000 tonnes the year prior, its contribution to the world market has depreciated from 4.88 percent to 4.73 percent.

The research from IGC-Ethiopia indicates the international market share has dropped even further. It attributes the lower gains to a lack of value addition in the coffee production chain. The study warns that Ethiopia is moving in the wrong direction concerning specialty coffee, and urges the need to work on profitability.

“The share of specialty coffee is not as high as we’d like to see, even grade one,” said Seneshaw. “The market share of grade-two specialty coffee is declining.”

Officials, however, maintain specialty coffee is performing well.

Read more: Ethiopian Reporter