Addis Abeba — In a bid to encourage exporters, Ethiopian Airlines has halved the shipping cost of coffee to the Middle East and Asia, bringing it down to $1.5 per kilogram.
The airline announced yesterday that this reduction in transport fees is intended "to encourage exporters and promote Ethiopian coffee in the international market."
Gizat Worku, general manager of the Ethiopian Coffee Exporters Association (ECEA), expressed his approval during an interview with Addis Standard.
He elaborated that the reduction in shipping costs from $3 to $1.50 per kilogram will be advantageous for both exporters and recipients of Ethiopian green beans, particularly those specializing in roasted coffee and small-batch green bean exports destined for Middle Eastern and Asian markets.
He noted that specialty coffee exports to Asia and Middle East countries are shipped in smaller quantities and are intended for high-end coffee retailers who sell them at premium prices.
Furthermore, Gizat clarified that the focus on expanding coffee exports to Asia and the Middle East is intended to mitigate potential losses anticipated with the implementation of the European Union's Deforestation-Free Products Regulation (EUDR).
This regulation, scheduled to take effect in December 2024, is expected to impact Ethiopian coffee exports to European Union member countries, which currently represent approximately 30% of the country's total coffee export market.
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In recent years, China has emerged as a key market for Ethiopian coffee exporters within Asia.
Official data reveals a significant increase in Ethiopian coffee export volume to China, rising from 4,200 metric tons in 2019 to 8,400 metric tons in 2021.
The Ministry of Trade and Regional Integration reported that Ethiopia earned $835.2 million from coffee exports in the first nine months of the current fiscal year.
Ethiopian Airlines' recent reduction in shipping costs arrives at a time when coffee exporters grapple with ongoing challenges.
A persistent container shortage, present since the start of the COVID-19 pandemic, remains a significant hurdle, limiting the export of major commodities like coffee.
The Ethiopian Shipping and Logistics Services Enterprise (ESLSE) has taken steps to address this issue by procuring over 3,000 additional containers. However, the shortage still persists.
The Ethiopian government has recently announced plans to implement digital solutions within the next three months to effectively track and manage available containers within the country. This initiative aims to tackle the container shortage problem.
Furthermore, transportation and logistics authorities have highlighted the significant impact of the ongoing security crisis in the Red Sea on Ethiopia's export and import activities.
The ESLSE has reported that major shipping companies have either reduced their visits to the region or suspended operations entirely due to the concerning conditions in the Red Sea.
This situation, as noted by the ESLSE, has resulted in logistical complications, impacting both the timeliness and cost of Ethiopian exports and imports.
