The Ethiopian Meat Producers & Exporters Association (EMPEA) on November 20, 2015, has set a floor price for meat products exported to the Middle East, according to Fortune.

Members of the EMPEA have made a unanimous decision to set the minimum price of exports to the United Arab Emirates to be USD 4,950 per ton and USD 5,000 per ton to the Kingdom of Saudi Arabia.

Nevertheless, there was a price exception made for a single company based in Mekelle to a leeway of USD 200 per ton.

The Association has reportedly set floor price the past years due to the concentration of exports to one region which in turn has intensified competition among traders in Ethiopia. Nevertheless, exporters reported that their buyers in the Middle East claimed other Ethiopian exporters were selling at prices which were lower than those previously set and used that information to bargain for lower prices.

This situation has forced exporters to offer lower prices, affecting the amount of profit the sellers earn as well as creating mistrust among Ethiopian exporters.

Getachew Hagos, President of EMPEA and Executive vice President of MIDROC Technology Groups ELFORA Agro Industries PLC, said going for a floor price is advantageous for both individual exporters and the country.

He also noted that “The unity will give Ethiopia more bargaining power.”

Abebaw Mekonen, Secretary General at the Association, said the Association had carried out a cost breakdown and set the smallest price possible, with further price reduction tantamount to incurring losses.

Source: Addis Fortune