Ethiopian Government May Ban Coffee Exporters Caught Hoarding, Defaulting
May 10 2011
Ethiopia, Africa’s biggest coffee grower, has threatened to ban exporters and producers caught hoarding beans or defaulting on contracts from trading on the domestic commodity exchange.
Those found holding surplus stocks in the hope of future price rises and therefore delaying deliveries are “stopping the country from getting the foreign exchange it could earn, making foreign buyers lose trust, and spoiling the country’s image,” Yakob Yala, state minister of trade, said in an April 29 letter to the Ethiopian Coffee Exporters’ Association. The directive, which was handed to Bloomberg News by an industry official, was confirmed by Amakele Yilma, a spokesman for the Trade Ministry.
Hoarding by traders is “harming the wide-ranging efforts of the government to grow the coffee sector,” Yakob said.
Ethiopia earned $528 million from its most valuable export in the year to July 7 and the Horn of Africa country plans to almost double revenue this year. Shipments totaled 3.64 million 60-kilogram (132-pound) bags of coffee between April 2010 and March 2011, ranking the country as the world’s eighth-largest exporter, according to the International Coffee Organization’s website.