Radar | Mar 14,2021
Prices for table salt jumped to 20 Br a kilogramme last week, around a third higher than the going rate earlier this month, and an abrupt departure from the trend for half a decade.
Salt traders blame the price surge on the interruption of transport services as war spills over into Afar Regional State, the source of almost all of the country's salt, while government officials claim it is the result of market speculation and misinformation. Earlier this month, a kilogramme of table salt had a retail price of 14 Br and sold for 500 Br at wholesalers in Mercato's Chew Berenda, a salt market hub in Addis Abeba. Wholesalers raised prices to around 580 Br last week, citing that security concerns in Afar have discouraged transport operators from making trips there, leading to a fall in supply.
"Drivers aren't going to Afar," said Fedila Mensur, a wholesaler in Chew Berenda who sells around 200 quintals of salt a day.
The militarised conflict in Tigray Regional State has expanded, covering the northern part of the Amhara Regional State and the north-western part of the Afar region in the past three weeks, causing disruptions in the supply chain. The major highway crossing the Afar state is a strategic logistical corridor serving as a gate to over 90pc of Ethiopia's imports and exports, valued at over 16 billion dollars last year.
There are over 1,000 licensed salt producers and four salt washing and processing plants operating in Afar. Washed salt from these plants is distributed to other plants across the country for further processing before making its way into the market. Gedo Hamallo, director of the Afar Mining Bureau, told Fortune there is a huge surplus of salt in the region but denied security issues affect the commodity's transport. Close to 3.5 million tonnes of salt are stored in warehouses for lack of options for export and a saturated domestic market.
Although the recommended daily salt intake is 10gm, the Ethiopian market demands close to 400,000tn of the commodity each year. However, only about 26pc of households get an adequate amount of iodized salt, exposing the population to health issues arising from iodine deficiency, such as goitre.
Wholesalers are faced with large surpluses and postpone or cancel restocking orders, but the situation has changed as they are raising prices in anticipation of a shortfall in supply, Fedila said.
Gedo claims the price hikes might partly be caused by recent measures taken by the Ministry of Trade & Industry.
A month ago, the Ministry revised market regulations and set the factory price for a quintal of salt at 322 Br, almost a quarter higher than the market tag of 257 Br set two years ago.
Other government officials also dismiss the claim that supply has fallen, blaming the surging prices on market speculation caused by alleged misinformation circulating on social media.
"The transportation issues have been solved," said Mesfin Assefa, the Addis Abeba Trade Bureau deputy director. "There is enough supply for the whole country."
The price jump may not surprise consumers as inflationary pressure is mounting lately, reaching a 26pc annual average in July 2021.
"This is a city where you experience a price surge in just a day," says a consumer who did not find the increase in the price of salt any different from what is observed in other commodities.
Ethiopia's staple food, teff, exhibited a 10pc jump in less than a month, sold for almost 6,000 Br a quintal in the capital.
There is also a dearth in supply of salt in the market, including at Chew Berenda.
"I don't remember a time when I was not able to get salt in the market. This is strange," said Genet Dejaga, a retailer in spices, including mitmita, a chilli powder for which salt is a necessary ingredient.
Matiwos Ensermu (PhD), an associate professor of logistics and supply chain management at Addis Abeba University, finds the recent upsurge unreasonable.
"The market is driven by speculation," said Matiwos.
He sees the increase in price makes no sense where there is a surplus at the source.
PUBLISHED ON Aug 14,2021 [ VOL 22 , NO 1111]
Radar | Mar 14,2021
Commentaries | Mar 26,2022
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Radar | Apr 26,2019
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Radar | Dec 26,2020
Fortune News | Nov 27,2018
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