Ethiopia Has No Plans to Nationalize Coffee Industry
This is a commodity which we rely upon to get our foreign exchange
07 April, 2009
April 7 (Bloomberg) -- Ethiopia won’t nationalize its coffee exports after seizing the warehouses of six of the country’s largest exporters two weeks ago and suspending their export licenses, Communications Minister Bereket Simon said.
“I don’t think the government intends to nationalize anything around this issue,” Simon told reporters in the capital, Addis Ababa, today. “That is not required in order to solve the problem.”
Ethiopian Premier Meles Zenawi on March 19 accused exporters in Africa’s largest coffee producer of hoarding the commodity. The government last week said the state-run Ethiopian Grain Trade Enterprise, a grain importer, will take over the export of the beans.
The government will pay the proceeds to the coffee exporters, Simon said today. The country’s roughly 120 coffee brokers had a duty to export coffee for the good of the nation’s economy, he added.
“This is a commodity which we rely upon to get our foreign exchange,” Simon said. “If some of our traders are not acting properly in this respect, the government has to make sure the market functions properly.”
Weekly coffee trading volumes on the Ethiopian Commodity Exchange fell to 1,916 metric tons last week from 4,503 tons the week before the government seizures.
Ethiopia’s foreign exchange reserves fell to about $850 million during the past year, enough to cover only one month of imports. The country’s coffee exports fell more than 10 percent in the first eight months of the country’s fiscal year, which starts in July, to 76,674 tons.