Bunge SA Proffers Least Price to Supply Wheat for Humanitarian Relief

The company offers to supply 35,000tn of wheat for 290 million Br

Bunge SA, an Amsterdam based grain trading company, made the least offer of close to 290 million Br to supply 35,000tn of wheat that will be distributed to beneficiaries under the fourth phase of Productive Safety Net Program.

The Public Procurement & Property Disposal Services (PPPDS) announced the bid on behalf of the Ministry of Agriculture & Natural Resources (MoANR), which secured the fund from the International Development Association (IDA). For the initial tender that was announced two weeks ago, eight companies showed interest purchasing the bidding document. However, only three submitted their offers; Bunge SA, Hakan Agro DMCC and Promising International Trading Company.

For the first lot that consists of 10,000tn of wheat to be delivered to the Adama central warehouse, Bunge SA offered 299 dollars a tonne while Hakan and Promising offer 302.6 dollars and 304.97 dollars, respectively. Bunge SA a company that was established in 1818 and expanded to Argentina, Brazil and later to the United States offered 295 dollars a tonne to supply 25,000tn of wheat to the Kombolcha central warehouse.

For the second lot, Hakan, a company with its headquarter in Dubai and operates in 26 countries for more than two decades, offered 297.77 dollars a tonne. Promising, a company that was established in 2007 actively works in Ethiopia, Dubai, Ukraine, Syria, Egypt and Tunisia, proposed to supply a tonne of wheat for 302.6 dollars.

The winning company will supply the wheat in a months time after the award, according to Solomon Betre, director of Procurement Services and Chairperson of the tender committee.

“The final result will be announced within a short period,” he told Fortune.

Recently the market was hit by a shortage of wheat which led to a 55pc price escalation on a quintal of wheat. Wheat price has increased from 1,100 Br to 1,700 Br a quintal. Since the beginning of this fiscal year, the price of cereals including wheat has been escalating leading the food inflation to reach as high as 20pc in March 2018.

To stabilise the market, the government has been attempting to procure wheat through the PPPDS since the beginning of this fiscal year. However, this year’s procurement was not successful as three wheat procurement tenders and awards were cancelled due to various reasons including controversy in the process and bidders’ unfulfillment of performance guarantee bonds.

The wheat is tended to be distributed to food-insecure families living in rural Ethiopia under the fourth rural Productive Safety Net Programme. The programme which is active between 2015-2020 and operates in Afar, Amhara, Harari, Oromia, SNNP, Ethiopian Somali, Tigray regional states, and Dire Dawa city administration reaching up to 10 million food-insecure people a year. It spends three billion dollars a year, out of which 14pc is funded by the Government of Ethiopia and the remaining by nine other donors.

Appraising the programme stating the situation the country is in, Messay Mulugeta (PhD), a lecturer and researcher for nearly two decades at College of Development Studies at Addis Abeba University (AAU), remarks that the project should not have run long as it might exacerbate dependency.

“As a sustainable solution, the government has to make major policy changes,” he said.

Reform on land policy, expanding eco-friendly mechanised agriculture, encouraging the youth to engage in development programs, developing the market chain to the farmer, and utilising all resources could be the major reforms, according to him.


Published on May 19,2018 [ Vol 19 ,No 942]



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