Ethiopia cold chain project tries to rebalance use of import/export containers in the country

Several Ethiopian farmers in the regions of Amhara and Oromia have grouped in agricultural clusters that are preparing to export high-quality avocados to the international market. At the moment, 600 quintals of avocado products have already been collected, prepared, weighed and packaged by 156 farmers and made available for sale to international markets.

This export operation follows a pilot project launched on 22 August 2020, when a first batch of 24-tonne of avocados was loaded on a train at the Modjo Dry Port in Ethiopia and exported to Djibouti by train, transported in refrigerated containers through the Ethio-Djibouti railway and subsequently shipped via sea from Djibouti to Europe. The pilot project was conducted within the National Cool Logistics Network, a joint project between the governments of Ethiopia, Djibouti and the Netherlands based on a Memorandum of Understanding concluded between the 3 countries, which aims at creating a cold chain network for export of agricultural produce, so to reduce post-harvest food losses of fruit and vegetables, increase shelf life and preserve the nutritional properties of such products during their transport to international markets, which takes approximately 20 days.

But this mode of transportation is also important because it allows a rebalancing of use of containers in the country, reducing transportation costs that are considered among the highest in Africa. Indeed, one of the factors that contributes to raise costs of transportation in Ethiopia is due to the fact that a large part of containers arriving full from the Djibouti port is returned back to the port empty at the importer’s expenses, due to the difficulty for carriers to find a return cargo within a reasonable time from the import of the container allowing them to resend the container back to the port full.

In this regard, already a study issued in 2010, titled “Supply and demand side constraints as barrier for Ethiopian exports”, observed that the level of imports in Ethiopia is approximately 5 times the level of exported goods (a problem that is common to most of African countries, where imports overexceed exports), with the consequence that in the country there is a large availability of empty containers that combined to the difficulties to find a returning load, generates additional costs in terms of repositioning of empty containers, payment of further terminal handling and storage fees, and reparation or maintenance of containers. The report observed that this inefficiency in the use of containers led to high container transport cost per unit for carriers that were passed first to the economic operators (importers and exporters), and in the end to consumers. International shipping markets require more and more containerized cargo at low costs, and this can be only achieved through a better use of empty containers for export products.

Ethiopia's landscape and climate are conducive to the production of a wide variety of fruits and vegetables. The country has a particularly eco-friendly environment with enormous potentials to become one of the bigger producer and exporter of fruits and vegetables in the East Africa region. According to a study titled “Ethiopia’s Potential Role in the Global Avocado Market” published in 2019, global avocado demand has doubled over the past 15 years due to its global recognition as a “super food” based on health benefits and because of its increased use in the food industry (where it is used as a natural ingredient in several food preparations) and in the cosmetics and pharmaceutical sectors. This offers a great opportunity to African producers such as Kenya and Ethiopia.

According to Transparency Market Research (TMR), the global avocado market was valued at US$13.64 bn in 2018 and is predicted to attain an overall value of US$21.56 bn by 2026. Another product that is registering a strong growth on international markets is the avocado edible oil, whose demand has risen to about 10% during the last year.