Business Tea export ambitions fizzle as coffee shipments reach new heights
By Meklit Dinku
November 9, 2024
Ambitions to see the export of 476 tons of tea leaves and earn nearly USD one million over the first quarter of the fiscal year have fallen flat as less than 260 tons of tea were shipped out over the last three months.
The volume, which represents 54 percent of the target set by officials at the Ministry of Agriculture, brought in half a million dollars. It represents a 25 percent drop compared to the volume of tea exported during the same period last year, as well as a 29 percent dip in revenue.
The subpar performance was the subject of scrutiny from members of Parliament earlier this week. Officials such as Shafi Oumer, deputy head of the Ethiopian Coffee and Tea Authority, presented justifications.
“Only the Gumaro and Wush-Wush tea plantations are engaged in exports,” he told lawmakers.
Both plantations, the largest and oldest in the country, are owned and operated by Ethio Agri-CEFT Plc, a subsidiary of MIDROC Investment Group. Together, the farms can produce up to 9,000 tons of tea annually, according to the company website.
Shafi told MPs that a 540 hectare plantation operated by East African Agri-Business Plc, an arm of the East African Holding business conglomerate, has yet to embark on exports despite having started cultivating tea.
“Verdanta, another tea investment in Gambella, has also been unable to start production due to various factors,” said the deputy.
Shafi told lawmakers that tea is being cultivated on 11,000 hectares.
“We have launched a national tea initiative, to introduce tea farming in different parts of the country, especially west and south Ethiopia,” he said. “The new tea farms are taking seedlings from the existing farms, and this is reducing the productivity of the existing farms.”
He claimed cold weather from the rainy season has also affected production.
The initiative he referred to is geared towards expanding tea cultivation at the smallholder farmer level in addition to bolstering commercial investments.
Meanwhile, the Authority reports coffee exports have grown during the first quarter. Other trade offices also report an improvement in revenues from the export of commodities such as gold, which has surpassed income from coffee.
Officials at the Ministry of Agriculture and the Authority want to see USD 1.9 billion earned from the export of 340,000 tons of coffee, tea and spices before the fiscal year ends in July.
According to government reports, the target is within reach as the export of more than 80,000 tons of these agricultural products brought in USD 522 million over the first quarter, with coffee accounting for the vast majority.