Ethiopia’s coffee output increase despite global production shriveling by 1.4 percent in the 2021/22 coffee year.
The International Coffee Organization (ICO) Coffee report and outlook (CRO) 2023 which was issued last week indicated that the world’s coffee production stood at 168.5 million bags (a bag is equivalent to 60kg) with a reduction of 1.4 percent in contrast to the production season of 2020/21.
When this trickled down to Ethiopia, the report stated that despite global production showing a reduction in the 2021/22 coffee year, the ancestral coffee roots of Ethiopia gained increments of 3.6 percent compared with the preceding year.
The ICO report read that Ethiopia is benefitting from a national programme which was started in 2010 that aims to increase productivity through improved farming practices and technological adaptations, with subsidized seedlings and assistance with replanting existing plots with higher plant density.
Through the programme, the replanted coffee trees are now being harvested, and coupled with favorable weather conditions this has led to production increase to 7.9 million bags for the 2021/22 coffee year from 7.6 million bags in the previous season.
Increasing area under coffee and adoption of good agricultural practice are said to be the main reasons behind the positive growth. It is also said that in the five years leading to 2020, the area harvested had increased by 22.3 percent or 156,117 hectares, and according to official government figures, “Techno Serve, a non-profit organization, has been in the country since 2012 running the ‘Coffee Farm College’, teaching farmers how to increase productivity. In 10 years, the Coffee Farm College has trained around 200,000 farmers.”
Currently, Ethiopia ranks in third place for the Arabica coffee production after Brazil and Colombia.
The CRO cited that the reduction has been hampered by the off biennial production and negative meteorological conditions in a number of key origins, “However, it is expected to bounce bank by 1.7 percent to 171.3 million bags in the 2022/23.”
Even though the production shows reduction the demand for coffee has continued on its increment according to the ICO annual report. The CRO shows that world coffee consumption increased by 4.2 percent to 175.6 million bags in coffee year 2021/22, following a 0.6 percent rise in the previous year. “Release of the pent-up demand built-up during the COVID-19 years and sharp global economic growth, increasing 6.0 percent in 2021, explains the sharp bounce back in coffee consumption in coffee year 2021/22,” it added.
However, it stated that the global economic condition would affect the coffee consumption in the past and current year.
“Decelerating world economic growth rates for 2022 and 2023, coupled with the sharply increasing cost of living, would have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7 percent to 178.5 million bags,” the ICO report reads.
As a result, the world coffee market is expected to run another year of deficit, according to the report.
Global economic impact and weather are stated as a challenge for the sector development in the future.
Increased global fertilizer costs and adverse weather conditions are expected to partially offset the positive impact of the on biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23,” the report explained.
The impact of the biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6 percent to 98.6 million bags in coffee year 2022/23, following a 7.2 percent decrease in the previous coffee year. Reflecting the cyclicality of Arabica’s output, its share of the total production is expected to increase to 57.5 percent from 55.9 in coffee year 2021/22.
Different analysis indicated that global coffee price will suffer in the coming months due to different factors unlike the past year.