Executives of the Ethiopian Commodity Exchange (ECX) are adding Wheat to the exchange floor following the federal authorities' decision to lift bans imposed on wheat exports.
This marks the second time the ECX opening a window for wheat export. It had established a window to allow exporters to export Wheat over a decade ago. However, high demand in the domestic market led to the ban remaining enforced for 14 years.
ECX executives recently added lupin beans, cardamom, and frankincense to the floor, increasing the portfolio of traded commodities to 17.
Federal authorities in the agricultural sector push for the country to boost wheat production to 107 million quintals farmed on more than half a million hectares in summer irrigation. They hope to see 10 million quintals be exported next year, a plan international experts say is "impractical" and "over-ambitious." Ethiopia's annual production of Wheat, the largest in Sub-Saharan Africa, is projected to reach 5.6 million quintals this year.
Federal authorities have announced that they would stop buying Wheat from outside that has been imported to stabilize domestic prices. However, Wheat keeps coming to the country through the World Food Program to provide for millions of food-insecure citizens. Ethiopia remains a net wheat importer, meeting over 70pc of the demand with domestic production.
“We'll allow wheat to be imported for aid," confirmed Esayas Lemma, director of crop development at the Agriculture Ministry.
Managers from ECX and experts from the ministries of Agriculture and Trade embarked on a study assessing the feasibility of including Wheat in the export list. The findings were presented to ECX executives under Wondimagegnehu Negera last week, in the presence of representatives from the ministries and the Standard Authority. ECX has prepared a draft contract.
"We'll begin trading wheat as soon as we get the green light from the Trade Ministry," said Netsanet Tesfaye, corporate communications manager.
Officials hope to see exporting Wheat increasing the flow of foreign exchange reserves the IMF disclosed plummeted to below one billion dollars.
Ethiopia has adopted a national wheat farm development strategy, aiming to improve Wheat production. The harvested area is estimated to be nearly 1.95 million hectares with an estimated yield of 2.83tns per hectare. Between six to seven million farming households are estimated to engage in wheat farming. This includes 1.3 million farmers organized to plow 30,000 clusters across the country. Each cluster is expected to plant improved seeds, use the same fertilizers, and benefit from the same extension support.
Damot Cooperative Union, formed in 2019, is in the West Gojjam Zone of the Amhara Regional State, with 180,000 farmers and 77 cooperatives. Last year, the Union collected 16,000qnt of Wheat, meeting half of its plan. Mezgebu Mekonnen, deputy manager, says his members are unhappy with the goal to export Wheat due to a shortfall in production.
"We'll not agree with the issue of exporting wheat because the production is not even meeting our demand," he told Fortune.
Utta Wayyu Cooperative Union in the South Zone of the Oromia Regional State was established in 2005, with a membership of 69,500 farmers organized under 219 cooperatives. The farmers grow teff, barley, and Wheat. The Union has a wheat flour plant erected in 2016, supplied by farmers in Arsi Negele and Shashemene areas. Last year, the Union collected 32,000qnt, almost half of what the leaders had planned.
The Union is required to supply Wheat through the ECX and a disaster and risk management bureau under the Shashemene City Administration, according to Gutema Bedane, its deputy head.
"We're not willing to do it because we can't afford to get a large volume of wheat," Gutema told Fortune. "The government should instead support us with finance."
Not everyone shares his reluctance to see Wheat exported.
Debebe Negash,35, is a smallholder farmer growing Wheat in Ginbichu Wereda, a rural village in East Shewa Zone. He depends on the Wheat he harvests once a year to support his family of four. He used to cultivate close to 89qnt on a four-hectare plot.
Debebe is happy with the federal authorities' plan to export Wheat.
"I'm eager to provide wheat through the ECX," he told Fortune.
PUBLISHED ON Oct 22,2022 [ VOL 23 , NO 1173]
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