21 August 2017

Ethiopia: Flick Teff Price Upsurge Hits Wallets

opinion

Purchasing teff in the summer season has never been easy for Meskerem Beyene, a housewife and mother of four living around Lideta Church. Nevertheless, this summer was especially trying, as the price of white teff reached close to 3,000 Br a quintal.

"Within three decades of raising four children, I have never experienced such increase in the price of teff," she said.

Meskerem used to buy a kilogram of white teff, a staple food in Ethiopia, also known as Eragrostis tef, for less than 20 Br half a year ago. Now the price has swelled close to 30 Br.

"Once it goes up, it never comes down like any other commodity," she said, explaining her shopping experiences. "Although the current rise is unprecedented, the price of teff usually hits the roof in the summer season."

The price has forced her and her husband to adjust their household budget although their income remains the same. And expecting more price increments in the months ahead, Meskerem bought more amounts of teff than usual, speculating the price will further swell in the coming months.

"I don't know what will happen next," said Meskerem, who bought two quintals of teff from a retail shop in Lideta for four months. "I, at least, have to be ready for further hikes."

One of the odd features of the past two or three weekends was that teff was in short supply than usual. The past week has seen a hike in prices of many kinds of cereal, especially teff , owing to diminished supply, sending the cost of living upwards.

The price of teff is skyrocketing across the capital - by some estimates, as much as 1,000 Br since January - putting the city's consumers under more challenges as the holiday season approaches.

Small-scale businesses are also feeling the pain.

Tadesse Kefyalew, early 30's, is a wholesaler of teff in Merkato' marketplace area. He supplied three types of teff including white, brown and mixed to various retailers and wholesalers, with a price ranging from 1,950 Br to 2,400 Br.

"It is not easy to get the teff as it was half a year ago," he said." Most of the farmers would have run out of teff by now."

He used to get the teff from the Ada'a area, located around 55km from Addis Abeba, before shifting his attention to other suppliers from Arba Minch and Dejen.

"As I have been spending more on transportation, I have been making price adjustments since the beginning of this month," he said. "The fact that the producers are highly unpredictable in setting prices during such a season makes the crop costly."

The price increase of teff is the second time in a year since October 2016, when the unrest in Oromia and Amhara regional states was at its peak. Then, in no less than two weeks, the retail price shot to 2,500 Br from 1,750 Br although it stabilised later to around 2,200 Br after the declaration of the state of emergency.

Teff accounted for more than half of the cereals cultivated in Ethiopia, reaching 50.2 million quintals during last year's Meher (Summer) season. The share of teff in crop production and coverage stood at 17pc and 24pc, respectively.

Aside from Merkato, the trend of a surge in the price of teff is also visible in other parts of the city.

Hayatu Bereka has been working at his uncle's teff retail shop located around Kazanchis for the past two years. In his stay at the shop, he never saw such a hike in the price of teff.

"We are getting the teff from our suppliers for an amount as high as 2,700 Br, which is the highest I have seen it go so far," explained Hayatu, who buys teff from Embur Town in Amhara Regional State, and also areas close to the capital, Dukem and Aleltu Wereda.

"The price has been steadily growing but it jumped by a thousand Birr last month."

Hayatu's neighbours also share his sentiment.

"For the longest time, it remained fixed," says Ketema Tadesse, another retailer of teff and other crops for about 10 years.

"It is usual in summer as many vehicle owners refuse to go frequently to the muddy rural areas to bring teff, which leads to a shortage of supply," said Ketema.

Besides retailers, the Addis Abeba City Government Cooperative Agency, whose objective among other things is to stabilise the market, has also been feeling the pressure of demand for teff increase in the past month.

The agency administers 10 Consumer Unions that are operating in each district of the city. The Agency helps the Unions supply crops, including corn, sorghum, wheat, teff and barley, from farmers and regional cooperative unions.

Owing to a surge in demand in the city, the amount of teff requested by the Unions has increased to 4,895ql in August from less than 3,000ql in July. The amount is 64 times higher than the requests made for wheat and barley.

"We are working to prevent at least further increases of prices even though there is shortage from the side of farmers," said Tesfaye Bana, a marketing expert at the Union. "If the shortage is fixed, we can easily reverse the price hike."

Founded seven years ago, Lideta Fana Cooperative Union, located in Lideta District, comprising eight different basic consumer associations, is among the unions that have requested more amount of teff in this summer season.

"We have warned our members that this would happen," said the General Manager of the Lideta Fana, Getachew Tefera. "Five months ago, we asked all eight associations for cash contribution so that we could stock enough teff with a price of 1900 Br, but no one responded.

As he anticipated, the demand from these associations has also increased, and the farmers started selling as high as 2,400 Br.

"This could have been handled if we had stocked more amount of teff earlier," he added.

Assefa Admassie (PhD), an agricultural economist with close to four decades of experience, believes that the government should rethink its policy towards the teff production.

"Even though controlling a cash crop like teff is a daunting task for the government, implementing a policy that advocates more incentives to teff producers will help solve the price hike," he said. "Modifying the agronomic characteristics of the crop will also be helpful in raising productivity."

The price hike is observed as the country is struggling to respond to the third-worst drought in half a century, which has left 8.5 million people in need of an urgent assistance.

This has contributed a lot to the increase in price of cereals in most parts of the country. In addition to the drastic surge in price of Maize, the price of teff has increased by an average of 18pc compared to the past month, according to the Central Statistical Agency (CSA).

Furthermore, an uptick of the cereal prices including teff pushed the headline inflation rate to 9.4pc last month, near the double-digit mark and against the target set by the second edition of Growth & Transformation Plan (GTP II).

Despite all these, Daniel Dintamo Head of Communications at Ministry of Agriculture & Natural Resources (MoANR) argues that such a hike is baseless rumour.

"There is no reason why the price would increase in a time where the effect of El Nino is very small," he said.

Nevertheless, Abush Mola, the head of Melka Awash Farmers Union, in Sebeta, Oromia Regional State, who has witnessed the price of teff bumping up from 1,900 Br to 2,176 Br, begs to differ.

"The price hike is visible everywhere," he said.

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