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Ethiopia: Country Seeks Preferential Treatment for Coffee
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Inter Press Service (Johannesburg)
30 April 2008
Posted to the web 30 April 2008
Kester Kenn Klomegah
Moscow
After several months of trade negotiations in the joint Russian-Ethiopian economic commission, Russia is considering allowing Ethiopia to bring in its different brands of aromatic coffees on a preferential basis.
If the first consignment is delivered this year, it means Ethiopia will be diversifying its coffee export market from its traditional markets in the United States, Britain and other parts of Europe.
"We know that Russia has a fast growing and big market for these products.
"From our side we'll do everything possible to explore the existing economic potential for cooperation in this sphere and tap it to the maximum," Dr Teketel Forssido, a professor in agriculture who was appointed last year as the new Ethiopian ambassador to Moscow, told IPS in an interview.
He said that Ethiopia and Russia have just concluded a range of new trade agreements.
Ethiopia's foreign trade policy is primarily aimed at identifying international markets for the country's agricultural products that will generate foreign revenues for the country.
Russia's liberalised market, which emerged after the collapse of the Soviet economic system, is one of those being targeted.
The Ethiopian government has adopted flexible policies that allow Russian business to invest in the coffee industry of Ethiopia. Land is basically free and can be cultivated using cheap local labour and local raw materials which can be processed without difficulty.
What is required is to process all necessary documents with the help of the appropriate ministries.
Forssido explained that Russian companies can buy Ethiopian products directly by negotiating with Ethiopian exporters. His government's agencies will provide support to facilitate coffee trade transactions for Russian importers.
Senior trade official at the Ethiopian embassy in Moscow, Amha Hailegeorgis, told IPS that "Ethiopia has been exporting coffee to Russia for a long time now. There are already private Russian companies which import Ethiopian coffee that are marketed in Moscow and St Petersburg.
"However, the amount of coffee coming into Russia is still too little. Most Ethiopian coffee reaches Russia via a third country.
"Therefore, during the last joint commission meeting, the Ethiopian delegation asked for preferential treatment for Ethiopian coffee. That is, for coffee to enter the Russian market without any tax. The Russian side has agreed to consider the proposal. It will boost the trade relations between the two countries," he explained.
A document released by the Russian ministry of foreign affairs last year says that goods exported from African countries are eligible for preferential customs and tariff treatment. Legislation stipulates that traditional export goods from least developed countries in regions including Africa should be exempted from import taxes.
Researchers at Moscow's Institute for African Studies say coffee remains one of the most important sources of export income for East African countries, notably Uganda, Ethiopia, Kenya and Tanzania.
Ethiopia is the Africa's largest coffee exporter and has been hard hit by the recent price slump. Coffee accounts for more than 60 percent of Ethiopia's exports, generating vital income for its population of 65 million, more than half of whom live on less than a dollar a day.
Income from Ethiopia's coffee has dropped by 110 million dollars, severely affecting the one million families who depend on coffee for their income.
While still selling to consumers in western countries for around 10 dollars per kilogram, the world market price for coffee is less than 50 dollar cents per kilogram, of which farmers only receive half.
Just five years ago, farmers received at least five times that amount. As a result of this massive slump in the coffee price, Ethiopian coffee farmers are facing poverty and hunger.
Coffee exporters praised the government for its marketing efforts.
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"Ethiopia's economy is agrarian. It has many agricultural products, including coffee and flowers, to offer the Russian market. The authorities are really pushing to promote Ethiopian coffee, get new markets and expand our business in Russia," Tewodros Yilma, managing director of Addis Ababa-based Alpha Trading Partners, told IPS.
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Preferential coffee trade with Russia? That is not what Ethiopia needs. Ethiopia is better suited to get a preferential oil trade regime with Russia. Russia is supplying almost all its former satelite states gaz and oil at a discount. We got enough buyers for our coffee. Russians have always been generous to Ethiopia. And given the fact that they were our masters and are awash with petro dollar, they have the moral obligation to supply us petroleum at cut rate. Petroleum is the single most pricy item eating up our meager foreign currency reserve.
well i have read the article by this well known journalist.i have also gave a shot to the earlier comment.from my view we need to utilise all the opportunities mentioned by the author and the commentator.it is good to know that our country has become more focused with its relations with russia.we need to do a lot for this noble dream of exporting our coffee to europe and in particular to the russian federation becomes sucessful.we the ethiopian business people are ready to work in the russian federation and boost the relation to a higher level.
well i have read the article by this well known journalist.i have also gave a shot to the earlier comment.from my view we need to utilise all the opportunities mentioned by the author and the commentator.it is good to know that our country has become more focused with its relations with russia.we need to do a lot for this noble dream of exporting our coffee to europe and in particular to the russian federation becomes sucessful.we the ethiopian business people are ready to work in the russian federation and boost the relation to a higher level.
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