Oromia Regional State has imposed a 5% levy on coffee beans sold for export.
The 5% fee applies to every kilogram of coffee bought from farmers for export.
The levy affects over 4,000 coffee producers in the region.
Oromia accounts for nearly 79% of Ethiopia’s total coffee exports.
The levy is tied to benchmark prices set by the Ethiopian Coffee & Tea Authority.
The implications for exporters:
Higher costs: The new 5% levy directly raises procurement costs per kilogram.
Margin pressure: Exporters must absorb the fee or pass it on, reducing competitiveness.
Pricing risk: Higher export prices may weaken demand in price-sensitive markets.
Cash-flow strain: Upfront fees increase working capital requirements.
Supply distortion: Exporters may seek non-Oromia sources or informal channels to avoid the levy.