(Hello Africa) Ethiopia seeks value addition to tap coffee potential amid growing demand from China – Xinhua

Hadero, named after a small coffee-producing town in southern Ethiopia, is among a rapidly growing list of coffee processing companies in Ethiopia specialising in value addition to the coffee sector and is part of a broader initiative to transform the country’s coffee industry.

ADDIS ABABA, July 17 (Xinhua) — At a bustling coffee processing plant in Addis Ababa, capital of Ethiopia, filled with the aroma of premium Arabica coffee, a group of women were busy sorting out defective green coffee beans to ensure that only the very best quality beans make it to roasting and packaging.

One of these dedicated women can remove defects from up to 150 kg of green coffee beans every day at the Hadero coffee processing plant. The sorted green coffee beans then go through the inspection, roasting, grinding and packaging stages before they are ready for shoppers on the shelves of supermarkets and cafes in Ethiopia and around the world.

Hadero, named after a small coffee-producing town in southern Ethiopia, is among a rapidly growing list of coffee processing companies in Ethiopia specialising in value addition to the coffee sector and is part of a broader initiative to transform the country’s coffee industry.

“We are a local company and our goal is to increase Ethiopia’s coffee export revenue through value addition and proper marketing,” said Mubarek Ahmed, the company’s business development director.

Ethiopia is Africa’s largest producer of Arabica coffee. Coffee production is a linchpin of the country’s agricultural economy. There are about 5 million smallholder coffee farmers in Ethiopia, and more than 25 million people in the country earn their living from producing, processing and selling coffee, according to official figures.

In the just concluded 2023/2024 fiscal year, which ended on July 7, Ethiopia earned $1.43 billion in revenue from the export of 298,500 tons of coffee, according to the Ethiopian Coffee and Tea Authority (ECTA), an increase in volume of about 20 percent compared to the previous fiscal year.

For comparison, coffee export revenues typically account for more than a third of the country’s total export earnings, which are about $4 billion per year.

Ethiopia is considered the country of origin of Arabica coffee and is known worldwide for its rich coffee quality, variety of flavors and aroma. Therefore, coffee from this country is in great demand all over the world.

However, the Ethiopian government and experts often cite the lack of value addition in Ethiopia’s coffee sector as a major bottleneck that prevents the country from fully exploiting its rich coffee resources, as it mainly exports raw coffee beans to the international market.

Amir Hamza, chairman of the African Fine Coffees Association, said Ethiopia and other African coffee producing countries need to focus on value addition and adopt better marketing strategies to increase their coffee export revenues.

“Africa has the best coffees, but they are not marketed as they should. After the green beans are exported from Africa, they are blended and roasted by companies outside the continent, particularly in Europe and the United States, and then sold in the Middle and Far East as coffee products of other origins,” said Hamza.

Given the urgent need to transform the coffee sector and increase the country’s revenues from its coffee resources, Ethiopia has introduced initiatives to encourage private sector engagement in value addition efforts.

“Ethiopia has been exporting green coffee beans for many years. We need to increase the value because the price of value-added coffee is much higher than green coffee. This will make a greater contribution to the Ethiopian economy,” Ahmed said.

He said that as a value-added company, Hadero is constantly trying to expand the export of its processed coffee by improving the standard of its products. “We source the best green beans from the market. Our packaging, which we import from China, is also unique and helps keep our products fresh and of very good quality.”

ETHIOPIAN COFFEE IS GROWING IN CHINA IN PRODUCTION AND POPULARITY

Ethiopian coffee has recently gained a foothold in the rapidly growing Chinese market, recording annual growth of 27 percent in recent years. The reason for this is that more and more young people are becoming accustomed to drinking coffee in a country where the tea culture is strong.

Over the past two years, China has imported up to 20,000 tons of Ethiopian coffee annually, making it the eighth largest importer of Ethiopian coffee, according to the latest data from ECTA. A few years ago, the country was ranked 33rd.

Adugna Debela, Director General of ECTA, in a recent interview with Xinhua, attributed the increase in Ethiopian coffee exports to China to a significant increase in Chinese coffee buyers importing coffee directly from Ethiopia.

Chinese platforms such as the China International Import Expo and various e-commerce platforms serve as effective gateways for foreign brands to enter the China market, providing opportunities that are being exploited by Ethiopian coffee exporters such as Hadero.

In January 2019, Hadero was one of the three premium Ethiopian coffee brands that sold more than 11,200 bags of coffee in a matter of seconds at the Ethiopian Coffee Brands Launch on Alibaba’s Tmall Global, one of China’s largest e-commerce platforms, in a joint initiative with the United Nations Economic Commission for Africa and the Chinese and Ethiopian governments.

Ahmed, the company’s business development director, said China is now “an emerging and large coffee market” with greater market potential and incentives for Ethiopian coffee exporting companies.

For Hadero, which supplies both the domestic and international markets, China is now the third largest export country after the United Arab Emirates and Germany.

“We are following the Chinese market closely,” said Ahmed. “China is a big market and we are happy to be a part of it.” ■