The Ministry of Trade is buying 720,000 metric tonnes of wheat to help stabilize the local market. This is almost twice as much as the largest wheat purchase in 2016.
The bid for the purchase is expected to open in a month, and will be paid for entirely by the Ministry of Trade. The Public Procurement & Property Disposal Services (PPPDS) will conduct the international bid on behalf of the Ministry.
The international price of wheat is currently 193 dollars per ton, according to the International Grains Council. Accordingly, the planned acquisition will likely cost the government over three billion Br.
“The purchase is a part of the ministry’s mandate to stablise the local market,” said Solomon Betere, procurement head at PPPDS.
A similar bid for a wheat purchase in 2015 was won by two companies, Hakan and Huyton. They were awarded a 890 million Br contract to supply grain to the government.
Headquartered in the United Arab Emirates, Hakan Agro DMCC, specializes in grain supply chain management. Huyton is known for supplying agricultural product in African and Asian markets.
A study conducted by the International Food Policy Research Institute a year ago indicates that the price effect of the recent drought has been much lower than that of the 1997/1998 droughts. It did not affect the labour and cereal markets. In March, 2016, in an effort to aid the 10.2 million people affected by the drought, the government bought 400,000 metric tonnes of wheat.
Since the recent drought outbreak, the government has bought and distributed 627,000 metric tons of wheat to affected areas.
Recent statistics released by the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA), after a recent assessment of the impact of the belg rains, indicated that the number of people in need of relief food assistance has decreased from 10.2 million to 9.7 million. The figure is expected to decline by half in the current fiscal year.
In 2015, Ethiopia imported 2.6 million tonnes of wheat, twice as much as 2014.
Compared with December of 2015, food inflation rates grew by 6.5pc in December 2016. In addition, the global wheat price declined by 23pc in 2016 from its 2015 prices, according to the United Nations Conference on Trade and Development. The price is expected to drop by 13pc by mid-2017.
After the delivery, the wheat will be distributed to more than 300 flour factories and 5,000 bakeries across the country.
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