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Ethiopian Government to put stop to coffee stockpiling
By Yohannes Anberbir
A new manager has taken the bold decision to confiscate stockpiled supplies of coffee.
Tefera Derebew, who replaced the current deputy prime minister as a minister at the Ethiopian Ministry of Agriculture and Rural Development (MoARD), said that suppliers and exporters were engaged in holding back their produce as they wait for the price of the commodity to appreciate.
“We have decided to confiscate all stocked coffee beans and deliver them ourselves to the international market,” he confirmed.
The government believes that many of the suppliers and exporters were engaged in collaborative market distorting tactics before the new electronic trading system was introduced late last year.
Now, as the new system has blocked these murky practices, the authorities say the exporters have resorted to stockpiling.
The new electronic commodity exchange system began trading coffee in December, replacing the old system. However, the modernised exchange has not helped the country increase its foreign currency earnings, leading to the industry putting pressure on the government to revert to the old system, the MoARD boss explained on Thursday.
Before resorting to confiscation, the government, including Prime Minister Meles Zenawi, tried to convince all involved to try and make it work. However, the results were not satisfactory, leading to the ministry setting a one week deadline that was extended an extra week at the request of the market players, according to the minister.
However, the Coffee Exporters’ Association refused to accept the government’s reasoning, saying that the stockpiling was being conducted because the price the exporters are getting on the international market is lower than the price they are purchasing the beans for locally.
“We told officials to allow the new system to interfere in the local exchange market so that the prices go down,” Alemwork Getahun, top official of the association, told Capital.
According to her, minister Tefera was also willing to consider concerns of the exporters, but she said the current process is disadvantageous to the exporter.
Coffee accounted for about 60 per cent of Ethiopian foreign exchange revenues in 2007/2008, when it earned more than 525 million dollars from the export of 170,888 tonnes of mostly high quality Arabica beans.
However, within the first six months of this fiscal year, the country earned only 70 million dollars from the 30 per cent of stock held in ECX warehouses that has been sold.
Only in Ethiopia will your hard earned crop be confiscated by the Government and deliverd to the International market
…..then WTF happens to the revenue generated from the sales? will this $$$ be confiscatets as well
ARE THERE NO COURTS IN ETHIOPIA
THIS IS ILLEGAL
is this how we join the WTO
i still ask ……Will they make them harvest more coffee next year to seize again
This tells me the tribal regime is desperate for foreign cash to the extent that they are prepared to loot private peoples hard earned commodity.
One thing people should realise is that they are not just robing one individual but entire communities beacuse many coffee traders are part of cooperatives.
This is a worrying deve;opment indeed!
weyane style, confiscate everything. i think next time they confiscate teff, maize,sugar,wheat etc. for weyanne the best solution is to beg, beg and beg again the western and the ethiopian dispora.
Whoo. It is interesting to see how the HODDAMS react on this matter. Weyannes and HOddama are now in brink of starvation. NO currency!
In the west the Government subsidies farmers so they can sell their crop at depreciated prices on the international market and the government will give them the difference so they are still profitable.
In Ethiopia farmers refuse to sell their crops at a loss so the Government will forcefully take their crops and sell them on the international market, and keep the money.
The problem has nothing to do with stockpiling. The question is who to trust who should do the business. Individual traders or Elleni’s ECX-Enron? Market economy or mafia economy?
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