Foreign suppliers may have been uninterested in supplying the Ethiopian cotton market, but this did little to dissuade a federal agency from pushing further. The Ethiopian Industrial Inputs Development Enterprise (EIIDE) has dispatched invitations to suppliers last week, stating its interest to buy 10,000tn of cotton.

The move comes following a failed attempt to buy the same volume last month. The Enterprise had wanted to buy 4,000tn of low- and high-quality and 6,000tn of medium-quality cotton. Although 15 suppliers bought the bid documents, only one showed up on January 25, 2022. It was forced to comply with public procurement laws, which proscribe public bids retendered when a single bidder appears.

Officials of the Enterprise have decided to give it another go, inviting 30 suppliers for a rebid scheduled to be opened at the end of March. Half these companies are those that bought the bid documents last month. Others were selected from a list of potential suppliers in a catalogue prepared by the Ethiopian Textile Industry Development Institute (ETIDI).

"If we're unable to procure [through the bid], the Enterprise will resort to direct procurement,” Endeshaw Legesse, director of industrial inputs procurement at the Enterprise, told Fortune.

Endeshaw attributes the lack of interest from suppliers to fluctuations in international cotton prices.

"They can't predict prices for the coming months," he said. "They aren't enthusiastic."

The cotton is to be distributed to 15 large textile industries and one wool factory after the Institute found a supply gap of 16,000tn. The textile industry requires an average of 55,000tns annually. Domestic production is expected to fulfil only 60pc of the demand this year, disclosed Mesele Mekuria, deputy head of the Institute.

The industry comprises 200 medium and large garment and textile factories and 3,000 small and micro-enterprises. The Institute has allowed six textile factories to import cotton for the last four years, giving them the nod to buy what they demand from overseas markets.

Bahir Dar Textile Factory is the largest of these textile plants, with the capacity to process 30,000tn of cotton a year. It sources cotton from commercial farms in the north and central Gonder areas of the Amhara Regional State but has struggled with shortages lately. Due to the shortfall, its plant was shut down for over a month, keeping 1,300 employees on its payroll. Established in 1961, the factory can produce 82,000sqm of fabric and 10,000 pairs of bed sheets a day. It uses 40pc of its capacity.

“The factory is unable to import on its own due to forex shortages,” said Mengistu Aregaw, chief executive officer (CEO).