4 May 2019

Ethiopia: Govt to Spend 4 Billion Br Buying Wheat

If the tender is approved, Ameropa will supply half of the total value, while Gemcorp and Agrocorp will cover 34pc and 15pc of the supply, respectively.

Three international companies - Agrocorp International Pte Ltd, Gemcorp Capital and Ameropa AG - offered over four billion Birr to supply six million quintals of wheat to internally-displaced and drought-affected people.

If the tender is approved, Ameropa will supply half of the total value, while Gemcorp and Agrocorp will cover 34pc and 15pc of the supply, respectively.

The wheat will be distributed to 5.5 million people affected by drought and 2.8 million displaced by conflicts in multiple parts of the country, according to Debebe Zewdu, communications director for the National Disaster Risk Management Commission.

Announced by the Public Procurement & Property Disposal Service on behalf of the National Disaster Risk Management Commission, a fedral agency responsible for providing support to those affected by human-made and natural disasters, the bid attracted a total of 58 companies.

Eleven companies submitted their financial offers during the bid opening on April 30, 2019. The supply was divided into six lots, each one million tonnes of wheat in size.

For the first lot, Agrocorp, a Singapore-based agricultural commodity trading and processing company established in 1990, offered the lowest price of 225.4 dollars a tonne. The UK-based Gemcorp that has been in business for the past five years in Africa, Eastern Europe, the Middle East and Latin America made the lowest bid for two lots at 247.78 dollars and 246.78 dollars a tonne.

Ameropa AG, a Swiss agribusiness company established in 1948 and engaged in the global distribution of fertilisers and grains, won the remaining three lots by offering 239.27 dollars, 242.47 dollars and 244.47 dollars a tonne.

The winning company will be announced within half a month, according to Worku Gezahegn, procurement team leader and chairperson of the tender committee.

Officials of the Public Procurement & Property Disposal Service were charged last week on suspicion of corruption related with the procurement of four million quintals of wheat that was awarded to Promising international. The company is still participating in wheat tenders and managed to place the second lowest bid for two lots in the the current bid.

This procurement will push the total value of wheat imported into the country this fiscal year to nearly two million tonnes. At the end of last month, the Service opened financial offers of 10 companies vying to supply four million quintals of wheat. The supply is intended to stabilise a market hit by shortages.

Ethiopia is investing an estimated half a billion dollars in wheat procurement while endowed with 1.7 million hectares of land suitable for wheat cultivation. The country harvests only 4.6 million tonnes of wheat, which only satisfies two-thirds of the demand, leaving the rest to be fulfilled by import.

Lack of proper policy on wheat has caused the country not to meet the demand with local production, according to Messay Mulugeta, a food security and poverty reduction expert and lecturer at the Addis Abeba University, College of Development Studies.

Due to the policy gap, Messay argues that the country has been importing wheat for the past half-century in foreign currency while having adequate human resources and land to cultivate the grain.

"The country has a serious policy deficit that does not incorporate the context, such as using our human and natural resources," Messay said.

Ethiopia

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