Ethiopian Business Review

Oranges have always been one of Addis’ favourite treats. However, over the past few years, their price has shown a steady increase, from around ETB15 a kilo to anywhere around ETB 80 per kilo now. Orange farmers and distributors have been experiencing issues that have contributed to the rise in prices of oranges, such as pests and horticultural disease. EBR’s Kiya Ali explored the issue.

Atkilet Tera, one of the largest markets for vegetables and fruits is located in Piazza in Arada District. Early in the morning, the hectic day begins when trucks starts to unload different types of fruits and vegetables with the help of laborers. Bursts of colours and smells from fruits and vegetables like orange, mango, apple, banana, avocado, tomato, onion, chili overwhelm the senses, in an area where customers go to do their shopping for a relatively cheaper price.
But for Dagnachew Belete, one of the wholesalers at Atkilet Tera, the recent hike in orange prices has been a rare occurrence. He hasn’t seen this kind of thing many times in his decade long stay working at Atkilt Tera. “There is a shortage of oranges. The price is increasing dramatically, both at the wholesale and retail level,” Dagnachew, who owns two warehouses in Atkilet Tera, tells EBR.

Currently, a kilo of oranges at Atkilt Tera goes for around ETB48. But, in retail stores, the price is as high as ETB 80. This is a dramatic increase compared to the average price of ETB35 in good seasons where there is a plenty of supply.

The price hike in fruit crops like oranges has been one of the factors for climbing inflation as observed in the Consumer Price Indices report published by the Central Statistical Agency (CSA).  In February 2019, year-on-year inflation increased by 10.9Pct from February 2018. This increase in the General Consumer Price Index is attributed to the rise of food inflation by 10.7Pct and non-food inflation by 11.2Pct. Among the components of food index that increased in February 2019 is fruits, which increased by 10.5Pct from last year.

Oranges are an economically important fruit crop in Ethiopia. The majority of oranges come from Awash, Shewa Robit, Mersa and Harer. A type of orange called Valencia grows from Awash and the sweetest types, known as Erer, come from Hare. Despite the increasing demand, Dagnachew says orange production has been seriously constrained by various factors, which have a direct impact on its price. “The primary reason for the higher prices of oranges is the shortage of production, especially during the period from November to May.”

In Ethiopia, orange production is a mixed agriculture, in which many horticultural, field and fruit crops, and shade trees are grown with and around trees. The land holdings on which oranges are cultivated varies from 0.15 hectare by the smallholder farmers, to multiple hectares by commercial farms.

According to the latest agricultural sample survey report published by CSA, about 104,421 hectares of land are covered by fruit crops. Out of this, the majority of the land is covered by bananas, avocadoes and mangoes, which account for 56.8Pct, 17.3Pct and 14.7Pct of the total, respectively. On the other hand, oranges are cultivated on 3,703 hectares of land, which accounts for 3.6Pct of the total area covered by fruits.

As a result, orange production remains low in Ethiopia. In the last harvest season, 305,614 quintals of orange were produced. This is much lower than other fruit crops such as bananas (4.9 million quintal) and avocados (1.5 million quintal). Oranges are also among the top fruit export items in Ethiopia.  Annual exports were valued at around one million dollars in the past fiscal year, while the country imported 77,000 dollars of the fruit during the same period.

Despite their success in the international market, the long supply chain in the country has contributed to oranges becoming so expensive. Usually, wholesalers like Dagnachew do not have a direct access to buy oranges from major producers and suppliers. Situated along the upper bank of the Awash River, Upper Awash Agro Industry Enterprise is a major producer of fresh as well as processed fruit and vegetable products for the local and export market. Although the Enterprise has a large market share in orange production, some wholesalers like Dagnachew are not allowed to buy directly from the Enterprise. However, this does not mean that there are no whole sellers who have direct access to the producer.

 “I tried many times to get permission to buy directly from the Enterprise. However I’m not allowed yet,” explains Dagnachew. “This has its own impact on orange price because it stretches out the supply chain, which in turn, escalates the price.”

On top of these challenges, orange trees have been afflicted by different diseases caused by many fungi, bacteria, viruses and virus-like organisms. In fact, viruses and virus-like diseases including psorosis, tristeza and greening were reported to have a significant role in the country’s declining orange production.
Abdela Negash, director of the Horticulture Development and Technology Transfer Directorate at the Ministry of Agriculture and Fishery explains that at the moment, orange production is reduced due to pests and diseases. As a result, the Ministry stopped production and dissemination of orange seedlings to avoid the spread of diseases and pests.

“Other than that, compared to a few years ago, people are becoming more aware of the health benefits of fruits like orange. So they’ve started to consume them regularly,” explains Abdela. “This increases the demand for orange while the supply has stayed the same. As a result, the price of oranges has dramatically increased.”


8th Year • Apr.16 - May.15 2019 • No. 73


 

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