avocado the next coffee

Avocado: the Next Coffee

Despite its importance and better productivity, little attention is given to the production of avocado in Ethiopia. Excluded from the extension programs run by the government, there is no support system deployed to help avocado farmers. Nonetheless, the consumption of the super nutritional fruit is growing throughout the country as people started to use it in different forms including as an edible oil. Understanding the potential of the fruit, many are joining the avocado market which is also bringing in a considerable amount of foreign currency into the country. EBR’s Ashenafi Endale explores.

For international hotel brands, providing a similar recipe throughout might be customary. However, for Heddo Siebs, general manager of Hyatt Regency which opened in January 2019, that is an old saying. “Right after I arrived in Ethiopia, sometime before the hotel was operational, I was voyaging through the capital and what I abundantly saw on the streets was avocado, which is expensive in other countries.”

Immediately, he decided to use locally produced avocado oil, unlike other hotels that rely on imported olive oil. “We contacted many farmers and suppliers to get the right quality of avocado. We also supported two avocado oil manufacturers to install their factories,” says Siebs. “Currently, we use around 100 liters of avocado oil monthly, all produced locally. For the supply we have two avocado oil suppliers, but currently we are entering into an agreement with another producer.”

A bottle of 750ml of local avocado oil is sold for ETB550, while 350ml can be bought with ETB315. This is way expensive in comparison to other edible oil products. Yet, it is even more expensive in other countries. This is because it takes many avocado fruits to make a small amount of avocado oil as only the oil part of the fruit is extracted.

Raw avocado is abundantly available in Ethiopia, but avocado oil as a by-product is new to the country despite its high quality and nutritional value. It can be also used in cosmetics for skin and hair treatments, besides its aesthetic value in restaurants. As a result, businesses are investing in the area.

Kaleb Service Farmers House Plc is among the pioneers in producing avocado oil in Ethiopia. The company partnered with Tradin Organic Agriculture B.V, a Dutch agribusiness giant, to produce and supply the oil. “Avocado is the illustration of one of the huge potentials that the country has in agro-industry”, explains Tesfaye Teklehaimanot, founder and manager of Kaleb. “Its growing acceptance pushed us to join the avocado oil industry.”

Avocado oil has generated growing interest among consumers due to its nutritional and technological characteristics, which is evidenced by an increase in the number of scientific articles that have been published. But the demand for the fruit is not only increasing in Ethiopia, where it is mainly used in the form of juice in cafes and consumed raw in households, but also at the global level.
Mexico is the top avocado producer with over two million tons of output annually, according to FAO. Ethiopia became the 20th avocado producing country globally in 2017 by producing 571,200 quintals, according to FAO.

The country also exported fresh or dried avocado worth USD165,000 to different countries, according to the nine-month report of the Ministry of Revenues for last fiscal year, up from USD1,000 in 2013/14. Currently, there are two main avocado exporters in Ethiopia, while there are many in the process of joining the export sector, according to Mikiyas Bekele, training department head at Ethiopian Horticulture Producers and Exporters Association (EHPEA).

Farmers in Butajira in the Southern state, export between 500kg and 1,500kg per season. Over 150 avocado farmers in Butajira are supported by Greenpath food, which also supplies avocado to the Hyatt. Established in 2015 by a former staff of the Agricultural Transformation Agency (ATA), Greenpath is the first certified organic fruit and vegetable producer and supplier in Ethiopia.

The second exporter is Mashav, a joint project of the Israel Development Agency and the Ministry of Agriculture, Livestock and Natural Resources. Introducing the Israeli avocado variety to over 2,000 Ethiopian farmers, Mashav increased its avocado export from two tons four years ago to 14 tons last year, according to Wale Getahun, deputy coordinator of the Mashav program. The Israeli avocado variety, Hass, has currently become the fifth largely produced avocado variety in Ethiopia, next to Fuerte, Nabal, Ettinger and Pinkerton.

Last year, Mashav, exported a Kilogram of avocado for USD5.7, up from USD3.6 four years ago, but the price of the avocado goes higher to USD17 in China, and a single fruit for two dollars in California.

Keeping this in mind, different reports state that Avocado is one of the most promising fruit crops in Ethiopia with production having quadrupled over the last five years. Avocado exports also fetches higher compared to the coffee exports. A kilo of coffee fetched USD2.2 in September, according to the National Bank of Ethiopia (NBE) price indication, while the same amount of avocado was sold for as much as five dollars.

More Ethiopians are also shifting towards avocado farming and the demand for avocado seedlings has also increased significantly, following the rising demand of the fruit both in domestic and export markets.

According to 2018/19 report of Central Statistical Agency, avocado constituted 10.16Pct of the 8.3 million quintals of fruits produced during the year, 60.1Pct being banana. Avocado also constituted 16.5Pct of the 119,908 hectares of land covered for fruits.

Over 1.9 million farmers are engaged in cultivating avocado on 19,760ha of land, and produced 847,936 quintals of avocado in 2018/19. The Southern State leads with 554,308 quintals on 12,376ha of land, constituting more than 60Pct of the production at a national level.

The farmers sell each fruit of avocado for three Birr on the farm. Each avocado tree gives two to three quintal per season. A farmer with ten avocado trees, for instance, can generate ETB72,000 per season with three Birr per fruit. The revenue can double, bearing in mind that a hectare can accommodate up to 400 avocado trees, if the full technology package is deployed.

The revenue potentially earned from avocado is also better than many crops, including coffee. The average revenue from avocado per hectare, in fact, is four times higher than the earning that can be generated from a hectare of coffee, which stood at ETB20,000, on average.
Yet, like most of crops and fruits, the supply chain in the avocado market is long. Local collectors, some of whom are farmers or part-time traders, collect avocado from small-holding farmers in villages before reselling it to wholesalers, retailers and consumers. Only wholesalers have better market information, enough capital, and the ability to purchase in bulk. The collectors usually fix the price by themselves, which is usually very low.

On the other hand, the export sector and supply to hotels and supermarkets in Addis Ababa is dominated by foreign agribusiness companies, which also dominated the seedlings market. “The demand for Ethiopia’s avocado is increasing rapidly, but production is too low. Keeping this in mind with the request of various organizations, we have started supplying seedlings to farmers across Ethiopia,” says Jan Michelsen, Head of Durabilis, a Belgium-based social impact company started as a foundation in 2003 and transited in 2010 into a private limited company.

These companies are not the only ones to benefit from the avocado seedling market. Understanding the potential of the market, some are leaving their profession aiming to change their livelihood, which includes Deriba Tenkolu, who was a biology teacher until he saw the growing demand of avocado. Ten years ago, Deriba started selling avocado seedlings in Itaya, Arsi zone, in the State of Oromia. He received the seed and advice from Melkasa Agricultural Research Center (MARC), which is also in Arsi. After accumulating capital from the sale of the seedlings, which is currently sold for ETB100 a piece up from ETB60 years back, he leased a hectare of land to cultivate his own farm. “Currently, I have eight fully ripe avocado trees. But selling seedlings is still my main source of income.”

Despite the potential of the fruit, most of the avocado farmers in the country are not supported by the extension program rather by market-driven entrepreneurship. “The extension program includes only cereals, which proved to be futile,” says Wegayehu Assefa, researcher at MARC.

Deriba also agrees that the government has no supportive mechanisms and incentives for such high value sub-sectors. “I have been trying to cultivate avocado on large farms using irrigation. I went on to try and study the land in the states of Gambela, Benishangul and parts of Oromia since land is scarce in Arsi,” he says. “I also finalized a proposal to establish an agro-industry factory that can produce and pack oil, and other products from avocado. However, I could not find any investment support from the government so far.”

Nowadays, avocado production is now mainly supported by NGO programs like Mashav, which has its own pros and cons. Yet, Wegayehu argues that the farming practice implemented by the international organizations with the aim of supporting farmers, highly affects the avocado production. “They advise farmers to use four by five meters plot for an avocado tree, while the right recommendation is seven by seven meters, it then becomes difficult for the tree to grow since it intermingles.”

Wegayehu says for Israeli Hass, four by five meters is recommendable because they deploy various technologies that increase productivity per smaller area. “However, they are not supplying that technology to the Ethiopian farmers whom they are supporting.” Wegayehu also says most of the NGO driven projects support very few farmers but falsely report to make it seem as if they are revolutionizing the sector.

A new avocado project is currently in the pipeline, according to insiders. Supported by NGOs and the Czech Republic, the project will be launched in Hawassa. In order to support the production of avocado oil in Ethiopia, GIZ is also running different projects. Melkassa Research Center, in its part, also tried to form youth enterprises with jobless graduates in the area, some of whom are currently successful avocado farmers.

“I do not understand why Ethiopia exports raw. For instance, Israel uses every part of the fruit, which is just waste in Ethiopia. Ethiopia has a big potential in avocado. But it is more profitable if we could add value locally, like exporting its oil rather than the raw fruit,” adds Wegayehu.
However, it has not been easy to develop the avocado market because of several reasons. The major obstacles are lack of market to absorb the production, the existence of a large number of middlemen in the market system, absence (weakness) of marketing institutions that safeguard the farmers’ interests and rights over marketable produces, among others.

Because of such constraints, it takes the avocado from Ethiopia over 35 days to reach Europe bearing in mind that avocado and all other types of fruits are perishable and need fast logistics to reach the central market as well as export markets. According to a study dubbed ‘Review on Avocado Value Chain in Ethiopia’, conducted in 2016, capacity building, post-harvest technology, improved extension; plant breeding and protection activities are highly recommended for Ethiopia in order to benefit from avocado.

Standardized packaging, introduction of cold chain management, establishing a local processing industry for better benefits of growers and investments, are also highly critical at all levels, the study suggests. The Ethiopian Commodity Exchange should develop marketing services for avocado to stabilize the avocado price, the study concludes.

Seibs, the hotel manager at Hyatt, on his part, also suggests that the government needs to realize the potential that the country has in avocado production. He goes as far as saying “If I were not a hotel manager, I would be an avocado farmer.”


8th Year • Oct.16 – Nov.15 2019 • No. 79

Ashenafi Endale


Leave a Reply

Your email address will not be published. Required fields are marked *


About us

Ethiopian Business Review is first class and high quality monthly business magazine.


CONTACT US

CALL US ANYTIME



Newsletter





This site is protected by wp-copyrightpro.com