Ethiopian Coffee Industry Set to Continue Steady Growth in MY 2022/23

Published 2023년 2월 26일

In MY 2022/23, Ethiopia is expected to improve on all markers, including consumption, production, and exports.In MY 2021/22, Ethiopians guzzled 3.45 million 60-kg bags (207K mt) of coffee, a figure set to rise to 3.78 million bags (210K mt) in MY 2022/23. The improving coffee consumption levels have led to steady production growth in Ethiopia, Africa's largest coffee producer and the third-largest Arabica grower in the world. The country is expecting to harvest 8.25 million bags of coffee in MY 2022/23, 100K bags more than the previous year. Ethiopian coffee exporters aim to capitalize on diminished coffee crops from competitors such as Colombia and Honduras, pushing the country's coffee exports up to USD 1.8 billion in MY 2022/23, a 28.6% YoY increase.

The coffee industry continues to grow in Ethiopia, where more than 15 million smallholder farmers supply locals with high-quality Arabica coffee beans. The sight of people gathered around a pot of coffee has become increasingly common in the streets of Addis Ababa. In MY 2022/23, the country is expected to improve on all markers, including consumption, production, and exports.

Source: Tridge, USDA

Ethiopia, the largest consumer of coffee on the continent, has witnessed steady growth in coffee consumption over the years. According to reports from the USDA, in MY 2021/22, Ethiopians guzzled 3.45 million 60-kg bags (207K mt) of coffee, a figure set to rise to 3.5 million bags (210K mt) in MY 2022/23. Other industry estimates place the country's consumption for this year at 3.78 million bags, making the East African country the 10th largest consumer of coffee in the world. Based on these estimates, Ethiopians consume 1.7 million bags more than Algerians, the second largest coffee-consuming country in the continent. The popularity of coffee in Ethiopia is apparent, with tea consumption paling in comparison with a meagre 83K bags (5K mt) yearly.

The improving coffee consumption levels have led to steady production growth in Ethiopia, Africa's largest coffee producer and the third-largest Arabica grower in the world. The country is expecting to harvest 8.25 million bags of coffee in MY 2022/23, 100K bags more than the previous year. Favourable weather conditions and less insect and disease infestation in the major coffee-growing regions have aided production growth of over 2.15 million bags over the past decade.

Ethiopia is now the fifth largest coffee producer in the world, surpassing Honduras, whose production dropped by 17% to 5.4 million bags in MY 2021/22 due to heavy rainfall. Tridge expects Ethiopia to surpass Indonesia, the fourth-largest global coffee grower, in the next five years. This projection is derived from the fact that Ethiopia's production has been growing faster than Indonesia's over the past few years and the trend looks set to continue. In MY 2019/20, the production gap between both countries was 3.25 million bags, while in MY 2021/22, the difference dropped to 2.43 million bags, a contraction of 820K bags in two years.

Ethiopian coffee exporters aim to capitalize on diminished coffee crops from competitors such as Colombia and Honduras, pushing the country's coffee exports up to USD 1.8 billion in MY 2022/23, a 28.6% YoY increase. Frequent droughts and frosts have reduced the quantity and quality of Arabica coffee production in South American coffee-growing regions. For example, in Colombia, coffee exports have been sluggish in 2023, with the South American country exporting 835K bags of coffee in January, compared to 1 million bags the previous year, a 19% decrease owing to adverse weather conditions.

Tridge expects the growth of the Ethiopian coffee industry to remain steady in the coming years, following the Ethiopian Coffee and Tea Authority's (ECTA) recent 15-year Coffee Development strategy aimed at quadrupling the country's annual coffee revenue and increasing farmer incomes more than five-fold within the decade.