MILAN – Ethiopia expects to increase its annual commodity export income by 30% during the current budget year started July 8, 2022, reaching a value of $5.4 billion, mainly as a result of increasing global prices of coffee and gold.
In the last budget year, Ethiopia’s export earnings has surpassed $4.1 billion for the first time, from a value of $3.6 billion recorded in the previous year.
The east African country is likely to boost its export revenue for the current budget year as the demand and price for the coffee is likely to continue increasing, according to a recently released research paper by Cepheus Invest Advisory.
The paper by Cepheus also stated that besides coffee, three export categories — textiles, flowers, and meat showed unexpected strength in registering double-digit volume increases.
Ethiopia’s export income will also benefit from “the ongoing expansion of electricity exports to neighbouring countries”.
However, the analysis also predicts that the increase in export income is unlikely to exceed 20%, since “export growth prospects for what were previously large export categories—such as oilseeds, pulses, and chat—will likely remain somewhat restrained owing to unsettled conditions in parts of the relevant producing regions.”
For the second year in a row, coffee was Ethiopia ‘s top export product in 2021/22 earning a value of $1.4 billion. Coming next were gold ($546 million) and flowers ($544 million).
Taken together, these three products now make up just over 60 percent of Ethiopia’s exports ($2.5 billion out of $4.1 billion), a high concentration ratio compared to past norms when the top three products rarely made up more than 40 percent of total exports.
Looking at where the near $500 million increase in exports came from this past year, the biggest sources of incremental demand were neighbouring Somalia (+132 million, mostly due to chat), Germany (+115 million, mostly coffee) and Netherlands (+93 million, mostly flowers). These three countries accounted for 70% of Ethiopia’s export increase in the just completed fiscal year.
