Federal authorities' efforts to secure sufficient fertiliser for the vast agricultural sector have hit a snag, as a recent international tender failed to attract enough bidders to meet farmers' needs. The Ethiopian Agricultural Businesses Corporation (EABC) sought to procure 1.27 million metric tons of DAP but received offers for only 890,000tns at an average price of 648 dollars a ton. The shortfall leaves a worrying gap in the Ministry of Agriculture's plan to buy 2.4 million tons of fertiliser this fiscal year.

Eight companies participated in the tender that opened last week, submitting freight-on-board (FOB) prices from Russia, China, Saudi Arabia, and the United Arab Emirates (UAE). Established firms like Montage Oil, West Trade, Promising International, Aditya Birla Global Trading (ABGT), and ETG were among the bidders, alongside newer entrants such as Bio Green, Mebek, and CPTDC.

Montage Oil bid for two lots totalling 120,000tns of DAP, while Promising International Trading competed for four lots, each containing 65,000tns. Promising International offered the lowest price for any lot, quoting 636 dollars a ton from Russia. West Trade submitted bids at 645 dollars and 650 dollars a ton FOB China, and ABGT offered 650 dollars a ton from China. ETG tabled the highest bid at 663 a ton from China.

The Corporation's executives, under its CEO, Kifle Woldemariam, will assess the bids before forwarding them to a national technical team comprising experts from the Corporation, the ministries of finance and agriculture. A board led by Girma Amente (PhD), minister of Agriculture, will make the final decision.

With authorities budgeting 1.3 billion dollars and 156 billion Br for the procurement of DAP and Urea fertilisers this fiscal year, the higher-than-expected DAP prices signal federal authorities may need to allocate additional funds. Last year, the federal government spent 930 million dollars on fertilisers, with federal subsidies amounting to 15 billion Br. This year, subsidies have increased dramatically to 53 billion Br, a 253pc jump, illustrating escalating costs in the international market.

"We've become like traders," Minister Girma told Fortune, referring to the new board formed by the Ministry of Agriculture, which is mandated to buy fertilisers at opportune times when prices are low, contrasting with the rigid bids of previous years.

The shortfall in response to the bids has prompted the Corporation to consider alternative approaches to meet fertiliser requirements.

"Retendering is an option, along with high-level negotiations that may include leaders," said Gashaw Aychiluhim, the Corporation's head of corporate communications and social responsibility.

International trade expert Yonatan Tadesse blamed the Corporation's procurement procedures for being protracted and costly.

"Its bidding process takes too long from preparation to completion," he said.

He argued that the lack of bidders unveils systemic issues with national creditworthiness.

"International companies, relying on rating agencies, perceive risks in our payment ability, deterring their participation," Yonatan said.