Drought could see Ethiopian coffee production could fall by 30%, undermining the country's main cash crop on which almost 15 million people depend.

"In coffee producing areas in western, southwestern and eastern parts of the country, the coffee harvest is estimated to have declined by 30% in 2002/03 due to drought," the US Famine Early Warning System Network (Fewsnet) said.

Ethiopia consumes half the coffee it produces

The report follows estimates by a leading Ethiopian academic showing the country has lost $300m in export revenues over the last two years because of a international slump in coffee prices.

Ethiopia normally produces about 300,000 tonnes of coffee, about half of which is consumed domestically.

As Africa's third largest coffee exporter behind Ivory Coast and Uganda, Ethiopia had raised its coffee exports by 14% in the year ending June 2002 to 129,095 tonnes worth $184.1m.

The United Nations last month warned that more than 11 million Ethiopians faced food shortages and possible starvation because of the drought and poor harvests.

Low prices

At the First International Conference on the Ethiopian Economy in Addis Ababa on Monday, Dr Dejene Aredo from the Department of Economics, Addis Ababa University, said in 2002 alone Ethiopia's coffee income fell by $110m.

Sorting the newly picked beans

"As a result the incomes of up to 15 million Ethiopian coffee farmers, which have already suffered as world prices of coffee tumbled to their lowest this year, will be adversely affected further," Fewsnet said in a report.

The Addis Ababa's Coffee Auction sold 235 tonnes of coffee, including the country's premium Gedeo and Borena types, last week due to the low prices, according to the country's coffee authority.

Fewsnet also warned of severe shortages of cereal and fodder due to the drought, and that prices had risen dramatically.