Ethiopia Ag Sector Opportunities

Agriculture is an important sector in Ethiopia, contributing 40% to GDP and 80% to the country’s overall export earnings. Despite agriculture’s prominent position within the Ethiopian economy, the country relies on significant imports to feed its population of over 120 million. Historically, Ethiopia has maintained important trading relationships with Russia and Ukraine—both for agricultural inputs such as fertilizer and commodities like wheat and sunflower oil. The ongoing war between these two nations has impacted the supply of both in Ethiopia, leading to severe productivity and food security disruptions. 

The war in Ukraine has caused a fertilizer price increase of as much as 200%. In 2022, Ethiopian Agricultural Trading Corporation (EATC), the state-owned enterprise responsible for purchasing fertilizer, failed to purchase enough fertilizer for the 2023 planting season, importing 11% less than the previous year and 30% less than the expected demand – yet laid out nearly double ($1.1 billion) of what was spent the previous year ($575 million). These fertilizer shortages could decrease crop yield by as much as 20% and lead to a substantial reduction in export earnings. U.S. companies able to provide agricultural inputs that stimulate crop production at competitive prices are likely find a receptive audience with EATC. 

Historically, Ethiopia has relied on wheat and sunflower oil from Ukraine and Russia. The Russia-Ukraine conflict has driven up prices. Immediately after the Russian invasion, domestic wheat prices surged by 50% while the price of sunflower oil almost doubled. To stabilize the domestic market, the Government of Ethiopia has imposed price and inventory controls to curb hoarding and illicit trade. With fertilizer shortages hampering domestic grain production, Ethiopia’s import needs are expected to increase by over one million tons. 

U.S. suppliers of wheat, sunflower oil and other agricultural produce could find opportunities in Ethiopia and other countries in the region. 

For more information on opportunities in the agriculture sector in Ethiopia, contact Commercial Specialist, Teddy Tefera, Teddy.tefera@trade.gov