The second shipment of wheat, purchased by the Ethiopian government from Ukraine, is expected to reach the Port of Djibouti by the beginning of September. The total amount of the wheat is two Million Quintals.
The shipment is expected to leave on August 25, 2014, loaded on five ships which has the capacity of carrying 420,000 quintals per head. The purchase was made via an international tender floated by the Government Procurement & Property Disposal Services (GPPDS) which cost the government 2.4 Billion Birr.
The first shipment has started to arrive and as of Tuesday, July 29, 2014 it is being stored at the central warehouse of the Ethiopian Grain Trade Enterprise (EGTE).
According to the public relation & trade information supportive process manager at the EGTE, Etenesh Gebremichael, the wheat is going to be distributed to different parts of the country for the purpose of stabilizing the grain market.
There are 281 flour factories to which the government is intending to distribute the wheat at a subsidized price of 550 Birr per quintal. These factories will then sell the flour at a price of 796 Birr per quintals for 5,000 bakeries which are identified and linked with
them.
Ali Siraje, State Minister of Trade, noted a quintal of wheat will yield only 73 kilogram of flour which leads to an escalation in price. He furthered, “Only the bakeries that are linked with the flour factories will get flour”.
There is also a different scheme of arrangement for Addis Ababa. Out of the monthly quota, 113,000 quintals, 4,520 quintals are allocated for Addis Ababa’s lower income residents. The City will also get quarter of the entire wheat while the State of Harari will receive the
least share, 2,500 quintals, Etenesh noted.
Covering the transport cost from the place of purchase to central warehouse, the government is going to set the retail price for the subsidized wheat to be 226 Birr for a quintal. According to Ali, this will cost the Federal Government 776 Birr per quintal.
Import of wheat is not a new phenomenon for Ethiopia. Its total cost of wheat import for the purpose of stabilizing the grain market from 2009/2010 to 2012/2013 has reached 8.47 Billion Birr.
“We expect good production during the wheat harvesting period between October and December,” said Ali. “But if we feel there is a gap, we will import additional wheat.”
The major supplier for the commodities Ethiopia has been purchasing, including a large portion of the one million tons of wheat it bought since September 2008, is the London registered Agrimpex Ltd.
Source: Fortune
