Ethiopian consumers’ incomes have grown, increasing the demand for wheat-based products.
Presently, commercial imports of U.S. agricultural products (excluding food aid) range from $30 million to $40 million each year. By comparison, Ethiopia’s agricultural exports to the U.S. appear to have reached a record of nearly $160 million in 2015, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Services said in a Dec. 19 report.
The country’s foreign exchange reserves recently were estimated at less than two months of import coverage, below the IMF recommended minimum of three months. Therefore, if Ethiopia is to meet the expected increase in demand for certain agricultural imports, it will need to, among other things, increase its exports, the report said.
Similar to the economic development trends of other countries, as Ethiopian consumers’ incomes have grown, the demand for wheat-based products (pasta, cookies, and biscuits), cooking oil, sugar, livestock protein (meat, milk and eggs), and convenience foods is increasing, according to the report.
Of these products, wheat, palm oil, sugar and sweeteners were the three largest agriculture imports by value in 2015. From 2010-15, wheat imports climbed 20% to a little more than $360 million, imports of palm oil doubled to nearly $425 million, while imports of sugar and sweeteners grew 65% to almost $180 million, the report said. It should be noted that the Ethiopian government intends to increase local production of wheat and sugar to reduce and eventually eliminate imports of these products. However, given local demand requirements and existing capacity constraints, the report expects imports of these products to continue for the foreseeable future.