Addis Abeba – The Ethiopian National Coffee Association has issued an urgent market alert to farmers, suppliers, and exporters, warning of mounting financial risks as global coffee prices decline and stockpiling persists across the sector.
“With global coffee prices currently on a downward trend, holding onto large stocks poses a severe financial risk. Delaying sales could lead to devastating losses and potential legal accountability for product hoarding,” the Association said in its March 17 statement, urging stakeholders to act swiftly.
The Association called on market actors to immediately supply coffee to the central market, mitigate exposure to further price drops, and ensure compliance with national regulations. “Act now to protect your business and support Ethiopia’s coffee heritage!” the statement added.
The warning follows a similar directive last week from the Ethiopian Coffee and Tea Authority (ECTA), which urged suppliers to release stock amid a sharp drop in international prices.
ECTA Director General Adugna Debela said global prices have fallen from around $4 per pound to $2.80 in just two months, with forecasts indicating a further decline to $2.50. He cautioned that suppliers holding coffee purchased during last year’s peak prices face significant losses if the downward trend continues.
Authorities say hoarding remains a key challenge. According to Ministry of Agriculture Ethiopia officials, some traders have withheld supply in anticipation of currency gains, a practice the government warns could trigger stricter enforcement measures. Hoarding beyond a year or diverting coffee into illegal channels is punishable under existing regulations, ECTA said.
Despite strong earnings, export volumes have underperformed. The Ministry of Agriculture reported that Ethiopia aims to generate $3 billion from 600,000 tons of coffee exports this fiscal year. However, in the first six months, only 200,000 tons were exported, about 74% of the planned volume, though revenues reached $1.35 billion.
Ethiopia remains one of the world’s top coffee exporters, with the sector accounting for up to 65% of agricultural export earnings and generating more than $2.6 billion in the previous fiscal year.
Recent global market trends suggest further pressure ahead. Arabica futures have dropped sharply amid improved production forecasts in Brazil, the world’s largest producer, while the International Coffee Organization has warned that although short-term supply remains tight, “downside risks” are increasing in the coming period.
According to a study published in the International Journal of Genetics and Genomics published 5 February 2024, Ethiopia, recognized as the origin of Coffea arabica and home to its rich genetic diversity, holds a unique advantage in coffee development.
The study notes that while this genetic diversity offers significant potential for crop improvement, the limited development and adoption of improved hybrid varieties remain a major constraint. Arabica coffee accounts for more than 60% of global coffee production and continues to play a central role in Ethiopia’s economy, contributing approximately 30% of the country’s foreign exchange earnings.
However, despite Ethiopia’s structural advantages, the sector continues to face persistent market and governance challenges.
Last year, authorities ordered a nationwide inspection campaign targeting speculative hoarding by suppliers and exporters, warning that the practice is significantly undermining export performance. The move came amid growing concern that export volumes were lagging despite favorable global prices and sustained government support.
Speaking during a high-level review of the first-quarter implementation of Ethiopia’s coffee export plan on 27 October 2025, Addisu Arega expressed dissatisfaction with the sector’s performance. While export revenues rose by 47% year-on-year, exceeding targets by 23%, the actual volume of coffee shipped reached only about 75% of planned levels.
“The sector is receiving substantial government incentives and support, yet the delay in achieving volume targets is disappointing at a macro level,” he said. “The main issue is not related to funding or global price volatility, but the failure to hit our annual volume target.”
Source: Addis Standard