Jul 11, 2012 SOMALI NEWS Comments Off on Ethiopia: Colombia Khat Stimulates Market
A new variety of khat that grows well during the dry season, sells for a lower price, and is very potent is benefiting sellers and buyers in different ways. But, unlike most varieties of khat, it hails from Amhara Regional State, where only three per cent of Ethiopia’s total production originates. It is changing supply routes as its popularity rises, writes YIDNEKACHEW GASHAW, FORTUNE STAFF WRITER.
For a long time Colombia, the fourth largest country in South America, has been synonymous with drug trafficking and drug wars. The world’s top cocaine producer is also a high-grade exporter of marijuana, opium, and heroin. Knowing that the country’s drug products are famous for their quality, Ethiopians who chew khat, a mild stimulant plant, named a powerful type of the leaves after the Latin American country.
Grown in the environs of Bahir Dar, seat of Amhara Regional State, 563km northwest of Addis Abeba, Colombia khat is known to make a chewer super high within a few minutes. Once derided as cheap and low quality and rarely available in the capital, Colombia khat is now competing with the most popular khat types: Beleche, Misimar, Gelemso, Wondo, and Aweday, which are identified by their origins.
Some have even quit other types, becoming loyal to Colombia. Fasil Adhanom, 27, a bus driver, is one of the new devotees to Colombia khat. For three consecutive years, his number-one choice was khat from Aleta Wondo, 337km south of Addis Abeba. Commuting between Addis Abeba and a number of towns in Southern Nations Regional State, he can easily access Wondo khat at a cheap price.
Unable to afford the ever increasing price and diminishing quantity of Wondo, Fasil turned to the cheaply available Colombia khat, which can be found in the market in quantities as low as 25 grams. Fasil’s daily khat consumption previously did not exceed a bundle that weighs about a kilogramme. However, the dwindling weight of the bundles has forced him to buy two, now.
Claiming it helps keep him stay awake, Fasil is usually on khat while driving. When he learnt about Colombia khat and its potency, he started buying it around Auto Bis Terra before going to the intercity bus terminal located near Mercato.
“Colombia khat has very good taste and quality,” Fasil told Fortune while buying 100 grams of khat from a kiosk. “I really like its cost effectiveness.”
Fasil only spends 18 Br a day. However, if he still bought Wondo, the cost would be double. Where Fasil buys khat is a popular joint specialising in retailing Colombia khat. Owned by Serkalem Tigistu, it opened its doors to customers in 2004, and started supplying Colombia khat after two years.
For Serkalem, 36, a returnee from Saudi Arabia, promoting Colombia khat was a difficult task. It took her three years to attract a significant number of regular customers of this type. She recalled how she struggled to survive on the khat business, due to the competition in the area.
“I was even contemplating to return to my initial plan of opening a beauty salon,” she told Fortune, referring her first business idea after she returned from her three-year stay in Saudi Arabia.
Following the advice of her close friends, she changed the type of khat she sold at her small kiosk. Starting with three kilogrammes of khat from Bahir Dar every day as a trial, she has currently reached 35kg to 50kg a day. She then separates the khat into various weights, such as 25kg, 50kg, and 100kg.
“I get 20 Br to 30 Br net profit from each kilogramme of khat every day,” she told Fortune.
Beyond satisfying the consumption of her regular customers, she is also able to deliver 15kg of khat daily to other retailers based in Mercato. Other supply destinations are as far away as Adama and Ambo, 98km and 110km to the southeast and west of Addis Abeba, respectively, in Oromia regional state. She sends 10kg each day to the two towns.
Each bundle, known as a zurba, is wrapped in false banana leaves to maintain freshness during the often long drive from places such Bahir Dar, 563km northwest of the capital.
On the afternoon of June 22, 2012, Serkalem was busy serving customers. She was weighing khat by the gram for four customers, including Fasil. For that day, she allocated 25kg for her customers, who came to her kiosk for no other type than Colombia.
“The popularity of Colombia khat has been tremendously increasing this year,” she said.
Unlike other types of khat, the source of Colombia is not popular for khat production. Out of 180,726tn of the country’s total production this Ethiopian fiscal year, Amhara Regional State contributed only three per cent. The majority of the production, 57pc, came from Oromia Regional State, of which Hararghe Zone, where popular varieties like Gelemso and Aweday originate, accounted for the largest amount at 73,919tn.
Though Ethiopia is the largest producer of khat in the world, the production in the current fiscal year showed an 11pc decrease, compared to the previous year. In the 2010/11 fiscal year, khat production reached 203,085tn, the most produced in the country, ever. During this year, the country also exported 40,973tn, earning 238.4 million dollars, which accounted for 8.7pc of total export earnings.
Khat became the country’s second largest export item, following coffee, in 2005/06. Since then, it has been sliding from its position, reaching fourth place in 2010/11.
Besides a production decrease, the current fiscal year also witnessed low export performance, compared to the plan, in the first two quarters. The country planned to gain 150 million Br in the first six months. However, it only earned 128 million Br.
The production decrease not only affected export performance but also the local market. One of the main khat distribution centres in Addis Abeba, located in Saris on Debre Zeit Road opposite Shoa Bakery, was deserted on Tuesday morning, June 26, 2012.
Wondo, Gelemso, and Guraghe khat could not be found in abundance at this market. Retailers, who are buying khat for their shops from the market, attributed the decreased activity at the market to a decline in supply.
Such declines are expected in the dry season, when the Saris market receives only three to four Isuzu truckloads of khat from southern and eastern parts of Ethiopia, instead of the five to six trucks received when the rainy season starts in earnest in starting from July. When retailers in Saris get a smaller amount of khat, they are forced to pay higher prices.
Following the increase, retailers like Mebruk Ibrahim, 45, always increase their prices to get enough profit. Aiming to keep their customers, who complain of high prices, they implement another mechanism. In addition to the popular khat types, they diversify their portfolio by adding Colombia and others.
Their move satisfies chewers and is expanding the base of Colombia khat users. Looking at the trend, Mebruk believes that, in the near future, he will shift to this Bahir Dar-sourced khat. Such transitions are good news for wholesalers like Mulugeta Yazew.
Mulugeta, who lives in Bahir Dar, has been engaged in the distribution of Colombia khat for the last eight years. His wholesale distribution covers a number of towns located in northern Ethiopia.
He started to supply the Addis Abeba market three years ago.
Receiving 70kg to 85kg of khat from 15 farmers at a fixed price, Mulugeta then decides the price range and sells to his 10 regular customers in Addis Abeba. The price range is decided after making a mini assessment of the Addis Abeba and Bahir Dar markets. Seasons also contribute to price fluctuations.
Unlike other khat types, the dry season is suitable for Colombia, when its price decreases. During this season, a single farmer, who plants khat on two hectares of land, can get 60kg to 80kg twice a month. Calculating the current 70 Br price offer for a kilogramme of Colombia, a farmer can get around 11,200 Br a month, net.
Around 10 minibuses of khat, each carrying around 13ql, transport the stimulant to Addis Abeba every day, during the dry season. Wholesalers like Mulugeta pay eight Birr for a kilogramme and minibus owners get around 10,400 Br from a single trip to Addis Abeba.
After reaching Addis Abeba, regular chewers like Fasil line up to buy khat by the gram.
Beyond claiming that Colombia khat helps him to do his job effectively, Fasil listed two additional unique characteristics.
“I can also sleep [after work] without any problem, after chewing it,” he said. “There is no need to allocate additional money for alcohol in order to reduce mirkana (the high).”
By YIDNEKACHEW GASHAW,
FORTUNE STAFF WRITER
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