Europe becomes major destination for Ethiopian commodities

European countries have become the major importers of Ethiopian commodities during the Ethiopian budget year concluded July 7, 2020, according to a new analysis by Cepheus Investment Advisory, a private equity firm. 

The analysis conducted by the firm shows that European Union markets, rather than the US or China, are driving Ethiopia’s export growth.

The Netherlands became the biggest buyer of Ethiopian exports in FY 2019-20, absorbing 308 million USD or 10 percent of total exports.

Together with Switzerland and Germany, these three European nations increased their purchases of Ethiopian goods by over 300 million USD last year, equivalent to the entire export increase (from 2.66 Billion USD to 2.99 billion USD) in the same period,” said the paper, entitled, ‘Ethiopia’s Recent Trade Performance: A Data Pack and some observations’.

“By contrast, demand from the US and China fell sharply in 2019-20, by more than 25 percent in each case, though both had been the no. 1 buyer of Ethiopian exports in recent years,” it said.

Meanwhile, the paper stated that China remains to be the leading origin for Ethiopia’s imports as has been the case for the last 18 years.

“Around a quarter of Ethiopia’s total imports, or 3.6 billion USD, are sourced from China, and the share is even larger if looking at just non-oil imports. Other leading sources of imports are India, Kuwait, United States (all roughly 1.1 billion USD each), and Turkey (612 million USD),” it stated.

The shift in Ethiopia’s top export markets reflects a gradually changing product mix, especially the sharp rise in gold exports (now 7 percent of total exports, all purchased by Switzerland) as well as in flower exports (14 percent of total and mostly going to the Netherlands).

The exceptional rise in gold exports was helped by policy reforms at the central bank, while the jump in rose exports, besides revealing large expansions at several companies.

It is also a very positive reflection of the well-established air cargo services that thanks to Ethiopian Airlines allow for the delivery of roughly 5 million rose stems to the Dutch cut-flower auctions on a daily basis.

Source: ENA