9 October 2017

Ethiopia: Corp's Attempts to Export Sugar Ends in Turmoil

A deal entered between the Ethiopian Sugar Corporation and a Dubai based buyer came to an abrupt end last week, after the latter pulled out of a contract signed to buy 44,000tns of sugar.

Agri Commodities wrote a letter of termination on October 3, 2017, informing the Corporation on the cessation of contract, valued at 2.2 million dollars. Controversy over the weight and quality of the merchandise led to the falling apart of the deal, accoridng to people close to the issue.

Following the termination, Bright Border Crossing Transport Association, the contracted company for the transportation of the item to Kenya, has begun returning the sugar from Moyale, a border town 794.7Km south of Addis Abeba, to Wonji. The trucking company has deployed 110 trucks to return the merchandise to the factory, beginning yesterday.

Agri had not made any payment to the Corporation claiming failure to confirm the shipping document, although it was supposed to settle the invoice before the merchandise exited the factory.

"If you had presented all the documents in time, you would have been paid under the letter of credit," reads the letter Agri wrote to the Corporation.

Signed by Krishnakant Mishra, representative of the company, the letter attributed the termination to the inability of the Corporation to present a certificate of weight and quality issued by an independent body.

"This is a minor discrepancy not to pay us for the sugar," Gashaw Aychiluhim, corporate communications director of the Corporation, told Fortune. "They will be accountable for the loss we incurred."

Agri demanded that the Corporation covers the 242,000 dollars it paid to transport the sugar and claimed compensation for the failure of the contract. The merchandise has been exposed to temperature and spoilage during the two-month trucks were stranded in Moyale.

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