The government is expecting to receive three consignments of fertilizers, each carrying 50,000ql this January, which is part of the 900,000ql the government purchased with 431.9 million dollars from five companies.
The five supplier companies are Yara Switzerland Ltd, Agri Commodities Group, Witraco, Helm AG and India Agro. The fertilizer started entering the country by the beginning of November 2014 and seven consignments close to 350,000ql have reached the port of Djibouti and have started entering the country, according to Shiberu Demisse, director of agricultural input marketing at the Agricultural Input Supply Enterprise (AISE).
The Enterprise announced a tender in August 2014 for the purchase of 521,000tn of NPS and 373,000tn of Urea. For the tender, a total of 11 companies have responded but only one of them, Yara, made an offer for each of the two kinds of fertilizers, while the remaining made an offer only for one type of fertilizer. This is the second year in a row that the Enterprise has bought NPS, a replacement for DAP, which it dropped two years ago. NPS has become favored over DAP because it has everything DAP has and Sulfur, according to Amarech Bekele, director of communication at the Enterprise.
Yara will supply 571,000ql of fertilizers, of which 371,500ql is NPS with a total cost of 286.4 million dollars, Agri Commodities won for the supply of 100,000ql of Urea with 30 million dollars, Witraco will supply 150,000ql of NPS with 78.5 million dollars, Helm Ag is to supply 50,000ql Urea with 19.1 million dollars and India Agro will deliver 22,539ql of Urea with 9.8 million dollars.
Yara, a Swiss based international grain and fertilizer trader with a history of financial awards to Ethiopian officials through Yara International, has been prominent in Ethiopia’s fertilizer market for many years and is now going to supply over half of the current round of government fertilizer purchase.
The tender was floated in 19 lots, eight for Urea and the remaining 11 lots for NPS. Yara won 11 lots while the remaining eight went to the other four companies. The expected delivery time for all the fertilizers is May 2015. The auction was divided into 19 different lots to avoid overlaps in the delivery to the Enterprises and at the Djibouti port, said Shiberu.
Many products are imported through the port of Djibouti, so to avoid the overlap we scheduled to transport only three consignments every month, he added.
While the price of fertilizers per ton was 321 dollars in October 2014, the time when the government purchased the fertilizers, by the next month, it had declined to 311 dollars per ton. But it increased to 312 in December 2014, according to YCharts, a provider of financial information based in Chicago and New York (US).
The Agricultural Inputs Supply Enterprise (AISE) is a public enterprise established in 1985 and accountable to the Ministry of Agriculture (MoA). The Enterprise has 31 million Br in assets, including 22 warehouses, seven distribution and sales outlets and 36 vehicles. It managed to achieve a net profit of 35.4 million Br during the 2011/12 fiscal year and 35.6 million Br during the following year.
The AISE buys and distributes agricultural inputs, including fertilizers, farming chemicals, different kinds of seeds, plants and animal medicines and vaccines, and laboratory equipment. The Enterprise imported 552,000tns of fertilizer in 2010/11 and 560,000tn the following year. Its imports in 2012/13 were down to 477,000tns.
The government is constructing four fertilizer factories in the Tigray, Amhara, Oromia and Southern regional states, with annual capacities of 25,000tns of fertilizer.
Currently, the Country cultivated 14.1 million hectares of land with cereal and pulses and the use of fertilizer per hectare reached 63Kg, according to a data from the MoA.
The government is constructing four fertilizer factories with annual capacities of 25,000tns
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