Risk on the Road Hikes Up Cereal Prices




“We were snot upposed to spend five days without doing anything,” Haile Belachew, a truck driver from Gojjam, Amhara region, said.

He was unable to come to Addis Abeba on Sunday, September, 2016, carrying maize from Gojam.

“The road is too risky and it is difficult to move here and there,” said Haile.

This as the result of the ongoing unrest that has hit parts of Amhara regional state. The risky road caused by the unrest has also increased the price of crops and some vegetables, as well as a shortage on the supply side.

As the market goers and traders described it, the price hike started a month ago, along with the unrest in Gondar and Gojam, which is where the lion’s share of magan and rice is grown.

For an experienced trader like Million Bedo, who has traded in Mesalemiya,Ehel Berenda for the past 14 years, the increment in price is something different from previous years. Established in the 1960’s, Ehel Berenda is a dedicated market for crops that come from each corner of the country.

“It is a usual trend to have a price increase when the Ethiopian New Year comes, but not so huge,” said Million. “More or less you may have one or two birr extra a kilogram, but now it has gone beyond that.”

For instance, magna teff from Gojam is now sold at 25 Br a kilogram – three Br higher than a month ago.

The locality, Gojam, is among the major teff producing areas. In the 2015/16 Meher rainy season, out of 17.5 million quintals of teff produced in the Amhara region, the East Gojam Zone contributed 4.6 million quintals, according to the Central Statistics Agency. Again, when it comes to Maize production, the West Gojam zone takes the lead with 8.6 million quintals.

At the country level, the Oromia region takes the lion’s share with 22.1 million and 39.5 million quintals of teff and maize, respectively.

When it comes the case of teff, it was within the range of 20Br that it used to be sold this year so far. Now Qey teff has grown from 900Br to 1,200Br.

Rice, which predominantly comes from the fields of Gondar is now sold for up to 16Br a kilo. The price was 14Br a kilo at the same time last year. In the Meher season, the South Gonder zone produced 924,760qt of rice out of a 1.2-million-quintal total production at the country level.

Another major crop that has seen an increase in price is maize. In the Addis market, maize is sold from 4.5 to six birr a kilo. Not comparable with the major crops, but Maize has also seen a 50 cent increment a kilo.

For traders like Million, the price hike is not the only issue. The supply side is also affected.

“Back in the day, we used to have 30 to 40qt of teff and rice in our store,” said Million. “Now this has shrunk by almost half.”

The number of cars that visit his store is now also declining. This is because the drivers prefer safer routes.

For instance, Haile told Fortune that he came to Addis because on the way back to Gojam he will also carry cement from the Derban Cement Factory.

Despite the disruption of the market, however, Million sees something positive about the market – the fast purchasing trend.

“People are rushing to buy the foods,” said Million. “Once we get the supply, we get buyers.”

He estimated that in the last week, they are selling up to 20qt of teff a day. In normal circumstances, this is a week’s sales volume.

The increment has led to some of the traders attempting to change their ways to fit with the current context.

For instance, Zeynu Reidwan has now focused on grains that came from nearby places. Two years in the business, he has a small plot at Ehle Brenda. Last year, his store was full of a variety of crops, including teff, rice and maize. But now he is only left with a few crops that are easily accessible, such as Dagosa and Barley, which also do not face price fluctuations.

“Last year, on average, I stored 10 to 20qt of teff and had maize up to 50qt,” said Zeynu. “So, in order to avoid the risk, I now avoid them.”

A buyer from Betel, west of Addis Abeba, seems overwhelmed by the change. An owner of a crop grinding house, he came to Ehle Brenda to see the market.

“Last month, I bought up to 20qt of teff,” he said. “But now I will definitely reduce the amount.”

The same price hike is also visible in other markets in the capital. Located near Shola market, around Megengna, there is another example of this hike.

The price of teff in this market has reached up to 27Br a kilogram given the current situation.

Teje Bolto, a seller at a crop store, said it was a month ago that the price started to increase.

During July 2016, the retail price of white teff, mixed teff and black teff was 20, 18 and 12.5Br a kg, respectively. In the same period, maize traded at 7.3 Br a kg and imported rice was at 13.6Br a kg, according to the Central Statistics Agency.

“We have been preparing for the past two weeks,” said Roman Hailemichael, a trader of hens, onions and eggs at Shola.

However, the supply side of eggs is not as usual, especially from Gojam and Wereta (South Gondar).

“Unlike previous times, I could not get eggs,” she said.

In terms of production, Gojam has produced close to 11.1 million eggs out of the total 37 million eggs just from the Amhara region. While Gondar has also produced 11 million eggs during the same period.

“The largest proportion of eggs comes from Gojam, but this could not be transported here,” she said. “We instead purchased them from Debre Berhan, but these are not like the ones from Gojam.”

Eggs are sold for up to 3.50Br a unit; whereas hens are sold for 160 to 280 Br, based on their size.

The problem is understandable by those who are close to the sources of these major crops and food items.

“There is no shortage, it is just the transport,” said Getachew Eshetu, CEO of the Damot Cooperative Union, which comprises 69 cooperatives and 124,000 households. “The production is not that much affected.”

The cooperative is now supplying maize and wheat to the market. He explains that the safety issue is also affecting the market.

Now that the price of transport from Bure to Kombolcha has see a two-fold increase, from 40Br a quintal, the Cooperative has been contracted to supply 10,000qt of maize to a warehouse in Kombolcha.

“It has been almost two weeks since we were supposed to deliver the maize,” said Getachew. “But we could not.”

“Now everyone is a buyer,” he added.

When it comes to the transportation fee, transport associations also told Fortune that the unrest is limiting their movement.

One transport association representative Fortune spoke with said that they had been unable to deliver a 10,000qt of sugar to the North Gondar area.

Both the drivers and the owners of the trucks are not willing to let their trucks go to those areas where the unrest is most intense.

 

 

 



By DAWIT ENDESHAW
FORTUNE STAFF WRITER

Published on Sep 13,2016 [ Vol 17 ,No 854]


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