Khat Prices Plummet in Ethiopia, Impacting Traders and Farmers

In Aweday, Ethiopia, the prices of khat, a mildly narcotic shrub, have plummeted following an overly abundant harvest. This development has significantly affected traders and farmers who rely on khat as one of Ethiopia's main exports, valued at over $217 million in the 2022-2023 Ethiopian calendar year.

Why this matters: The decline in khat prices has far-reaching implications for Ethiopia's economy, as it affects not only the livelihoods of traders and farmers but also the country's export revenue. Furthermore, the impact of this decline may be felt beyond Ethiopia's borders, as khat is widely consumed across the Horn of Africa.

Ramadan Youssouf, a 30-year-old khat trader in Aweday, describes khat as "green gold." He explains that locals use it in the morning to wake up and believes it has health benefits, stating, "We use it in the morning to wake up, if you chew (it) you can never get sick." Youssouf's dilated pupils reflect the stimulant effect of khat, which is widely consumed across the Horn of Africa.

Aweday is one of the largest markets in the world for khat. The abundant harvest has led to a significant drop in khat prices, affecting traders and farmers. Mohamed Ibro, a 45-year-old trader, complains, "The prices are too low." Traders examine the leaves and weigh the bundles before agreeing on a price, with no weighing scales or price lists in sight. The thick pink stems and intense green hue of the leaves are signs of superior quality.

Khat is one of Ethiopia's main exports, representing around 10% of national exports between 2019 and 2022, according to figures from Ethiopia's Central Bank. Many of the bundles from the Aweday market will make their way to Wajale, a border town straddling Ethiopia and Somaliland. The Harar region and neighboring areas of East Hararghe and West Hararghe are now home to half of Ethiopia's khat farms, spread across some 281,000 hectares (over 690,000 acres).

The khat industry is facing challenges, including an increase in taxes and the recent tightening of conditions for exporters to obtain a commercial license. Additionally, galloping food inflation is affecting the livelihoods of traders and farmers. Iftu, a 50-year-old shopkeeper, laments, "We make money, but not enough. What we get, we eat."

Farmers like Youssouf Mume, a 70-year-old who has replaced his coffee and other crops with khat, are also struggling. He says, "Khat needs much more attention and more water than other plants, yet would always bring in better money. But now it's not worth it." Hawa, another farmer, reveals that in a good year, they can make around 150,000 birr (approximately $2,600) selling some 200 kilos of khat, but since September, they have only sold 30 kilos.

The plummeting prices of khat in Aweday, Ethiopia, have had a significant impact on the livelihoods of traders and farmers who rely on this stimulant shrub. With khat valued at over $217 million in the 2022-2023 Ethiopian calendar year and representing around 10% of national exports, the current market situation is a cause for concern. As the industry grapples with challenges such as increased taxes and tightened export conditions, the future of Ethiopia's "green gold" remains uncertain.

Key Takeaways

• Khat prices plummet in Aweday, Ethiopia due to abundant harvest.
• Khat is a $217 million export industry, 10% of Ethiopia's national exports.
• Low prices affect traders, farmers, and Ethiopia's economy.
• Khat is widely consumed in the Horn of Africa, impacting regional economy.
• Industry faces challenges: increased taxes, tightened export conditions, and inflation.