Summary:

On 26 June 2023, a representative of coffee roasters in Sfax pointed to a potential crisis in the industry as coffee supplies dwindle, forcing roasters to the brink of bankruptcy.

The representative from a local trade union, Mohamed Dabbech, indicated that numerous coffee roasters in the Sfax area have struggled to source coffee from the government’s trade office, which oversees the import of subsidized coffee that supplies most Tunisian cafes and stores.

As the Tunisian government struggles to fund its vast network of state enterprises and subsidy programs, financial shortages are becoming more common, leading to food supply shortages and struggles to meet salary obligations in a timely manner.

Dabbech warned that as many as 21 coffee roasters face the potential for bankruptcy, with as many as 500 jobs potentially lost should the shortages continue.

Outlook:  

The government’s budget crisis continues to deepen, creating challenges across a number of sectors where government subsidies, regulation, and state-owned enterprises are deeply embedded. Coffee is one of many sectors that is highly regulated and closely managed by the government due to the market’s dependence on subsidized prices.

The 2023 budget was built on the assumption that a $1.9 billion International Monetary Fund (IMF) loan would be issued. However, the finalization of that loan has been stalled due to an apparent lack of willingness on the part of the Tunisian government to proceed with the agreed-upon set of economic reforms.

Similar challenges will likely continue to arise as the government budget is stretched into the second half of the year. This will increase the potential for unrest as working Tunisians experience the impacts of government shortfalls. Frustration has continued to grow over shortages and price increases which have hit Tunisia’s working poor the hardest.

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