Why Is Ethiopia's Coffee Industry Under Pressure in Tigray?

The chairman of Ethiopia's Tigray interim government met the U.S. special envoy for the Horn of Africa on September 12 to discuss bottlenecks in implementing the Pretoria Peace Agreement. Washington offered support to speed up the interim government's work, while Tigray called for international pressure to ensure displaced people return home and the humanitarian crisis eases.

Since the agreement was signed, violent conflict has not subsided, divisions within the TPLF have deepened, and the risk of civil war has resurfaced. Currency depreciation and soaring prices weigh on livelihoods, and the turmoil in northern farming areas is spreading toward the southern coffee producing regions, where exchange rate instability and rising costs test the coffee industry.

The chairman of Ethiopia's Tigray interim government met with the U.S. special envoy for the Horn of Africa on September 12, and the two sides discussed the difficulties and paths forward in implementing the Pretoria Peace Agreement. The U.S. side expressed support for the Tigray interim government in accelerating its完成任务, while the Tigray side called on the international community to jointly exert pressure to ensure the return of displaced people and alleviate the humanitarian crisis. However, after the agreement was signed, local violent conflicts have still not subsided, factional divisions within the TPLF have intensified, and the risk of civil war has resurfaced. At the same time, the depreciation of Ethiopia's currency and soaring prices are putting pressure on people's livelihoods. The turmoil in the northern agricultural areas is gradually spreading to the southern coffee-producing regions, and exchange rate instability and rising costs have become severe tests for the country's coffee industry.

According to local Ethiopian media reports, the chairman of the Tigray interim government held talks on September 12 with the visiting U.S. special envoy for the Horn of Africa, and the two sides exchanged views on the difficulties and opportunities encountered in implementing the Pretoria Peace Agreement. It is reported that the discussion focused on the specific bottlenecks hindering the implementation of the agreement and explored possible ways to advance it.

After the meeting, the U.S. special envoy said that Washington is willing to assist the Tigray interim government in speeding up its work and completing its established tasks. The chairman of the Tigray interim government pointed out that there is an urgent need for the international community to form a joint force and exert pressure to promote the full implementation of the agreement, so that displaced people can return home and the humanitarian plight faced by Tigray refugees can be resolved. He warned that if this cannot be achieved, regional peace and stability may suffer serious consequences.

According to a message posted by the U.S. embassy on social media, both sides agreed that the Pretoria Cessation of Hostilities Agreement must be fully implemented, as only in this way can lasting peace be brought to the Tigray region.

Looking back at the background, in November 2020, the conflict between the Tigray People's Liberation Front (TPLF) in Tigray and Ethiopia's federal central government intensified, triggering a large-scale civil war. After two years of fighting, the two sides signed a ceasefire agreement in Pretoria, South Africa's administrative capital, in November 2022, namely the Pretoria Peace Agreement, and formed the Tigray Interim Administration (TIA) to manage the region.

Although the peace agreement has been signed, violent incidents have still occurred from time to time recently between the TPLF and the Ethiopian government. Long-standing disputes over land issues have turned the conflict into sustained violent confrontation. In addition, some measures by the Ethiopian government have aroused dissatisfaction among regional armed forces in Amhara, and larger-scale clashes broke out as a result.

However, cracks have also recently appeared within the TPLF. Some people are dissatisfied with the current interim chairman, and contradictions between factions continue to worsen, with a risk of sliding into civil war. For this reason, on September 10, the deputy chairman of the Tigray interim government and director of the Cabinet Secretariat for Peace and Security issued a stern warning to all TPLF factions, demanding an immediate halt to any actions that exacerbate political instability and undermine public unity. But analysts pointed out that U.S. intervention at this time may instead intensify divisions between the two sides and fuel antagonistic sentiment.

Judging from the current situation, the internal rift within the TPLF is already quite serious, and regional civil war could be triggered at any time. The Ethiopian government will also not sit idly by. Once it intervenes, the fighting may escalate into a more serious civil war, dealing a heavy blow to many industries in the country.

At present, the foreign exchange policy previously pursued by the Ethiopian government has led to a sharp depreciation of the national currency, followed by rising prices. Although the government has provided some subsidies, prices are still rising fiercely, with food, meat, and cooking oil bearing the brunt. Compared with the previous period, the price of mutton has increased by 1,000 to 2,000 birr, the prices of some goods have quadrupled, and daily necessities such as onions and teff have also become more expensive.

Tigray, located at the northernmost tip of Ethiopia, is an important agricultural region in the country, mainly producing food crops such as wheat and corn, and relying on livestock farming such as cattle and sheep as a pillar, with products mainly supplied to the domestic market. At present, endless internal strife and frequent violent conflicts in the state will inevitably further push up inflation in Ethiopia, keep prices climbing, and continuously increase the pressure of living costs on residents.

For the country's critically important coffee industry, although the current conflict is mainly concentrated in the north and does not yet pose a direct security threat to the southern coffee-producing regions, the most troublesome problems are exchange rate fluctuations and rising costs. Due to the severe national security situation, the exchange rate is highly vulnerable to shocks, and coffee prices will also rise accordingly, which may lead to a surge in illegal trade activities and adversely affect the healthy development of the industry.

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The above content is compiled by CoffeeHunters, a coffee news website.