At a time when headline inflation has reached its highest rate, driven mainly by a surge in the prices of food items, the government has come closer to procuring 400,000tn of wheat in a bid to stabilise the market.
The Public Procurement & Property Disposal Services (PPPDS) is making the procurement on behalf of the Ministry of Trade (MoT), most likely from the Dubai-based Promising International Trading Company, for an estimated three billion Birr.
The contract was previously awarded to the Pakistani grain supplier, Shakeel & Company, for 2.6 billion Br, but it was cancelled due to the supplier’s failure to provide the performance guarantee bond. Shakeel has sent a complaint letter to the Ministry of Finance & Economic Cooperation (MoFEC), where the case is still pending.
The procurement also comes at a time when 7.8 million people need food assistance as a result of the conflict along the administrative demarcations of the Oromia and Somali regional states, according to the Humanitarian & Disaster Resilience Plan of 2018.
Following the cancellation of the bid, the Service has re-announced a tender on February 8, 2018.
The international bid was opened on the premises of the Service on March 13, 2018. Forty-seven companies bought the bidding documents. While Midstar Singapore was disqualified due to its late submission of bid guarantee document Kassie Financial Management Service was unable to participate due to its late arrival for the bid opening time.
Bunje SA, ADM International Ltd, Promising, COMMI trade Ltd and Hakan Agro DMCC presented their bid documents. While Bunje and Promising participated in all four lots, Commi and Hakan participated in two and ADM in only one.
The least price came from Promising, an agricultural products trading company, established in 2007. It put up 261.45 dollars a tonne, 260.80 dollars a tonne, 258.15 dollars a tonne and 250.15 dollars a tonne for the four consecutive lots that consisted of 100,000tn each.
The lots have different prices as parameters such as freight prices are considered.
“The final result will be disclosed within four days of opening,” said Solomon Betre, head of the tender committee at the Service.
The winner will deliver the wheat in 60 days to Djibouti port, where the consignee will move the freight to an inland destination, according to Assefa Solomon, deputy-communication head at the service.
Ethiopia has, over the years, been importing wheat for market stabilisation. In 2011/12 and the following year, imports stood at 4.2 million quintals and 5.6 million quintals, respectively, decreasing to five million quintals in 2013/14.
For a country without many natural resources, fulfilling deficits by importing wheat is not a proper solution, since the population increases dramatically and there is a shortage of hard currency, according to Amare Bantider, lecturer and researcher at Addis Abeba University’s (AAU) Centre for Food Security Studies for over two decades.
Food inflation currently stands at 20.9pc, which is one of its highest levels reached since the El Nino-induced draught three years ago.
“Food security can only be realised by the integrated utilisation and conservation of water, soil, livestock and other natural resources,” Amare noted. “There was a study made in the 1990s that showed that Ethiopia could feed 200 million people if the country applied moderate technological improvements and family planning.”
Currently, the international price of wheat stands at 254 dollars a ton, according to the International Grains Council.
Leave a Reply