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Wheat Supply Queues to Fill Sharp Supply Gap

The tender was opened in the absence of senior officials of the Service

April 20 , 2019
By NOEL MINWAGAW ( FORTUNE STAFF WRITERS )

Ethiopia is procuring an additional 400,000tn of milling wheat to stabilise the local market for an estimated 2.8 billion Br. 

Ethiopia is procuring an additional 400,000tn of milling wheat to stabilise the local market for an estimated 2.8 billion Br.

Ten international companies are vying to supply the wheat through a tender opened last Friday, April 19, 2019, at the premises of the Public Procurement & Property Disposal Service on King George VI Avenue in Sidist Kilo.

Bids of four lots of equal volume attracted the interest of 56 companies, though only a fifth submitted financial offers. The UK-based Gemcorp, established in 2014 and with a presence in Africa, Eastern Europe, the Middle East and Latin America, made the lowest bid for all of the lots.

Gemcorp made the lowest offer of 249.34 dollars, 248.34 dollars, 246.34 dollars and 244.34 dollars a tonne for the four lots, reflecting price variations of freight costs and other parameters. This brought the aggregate final bid of Gemcorp to nearly 99 million dollars.


The runner up for the first lot was Bunge SA, an American agribusiness and food company, soybean exporter, food processor and trader of grains and fertilisers.

The Dubai-based Hakan Agro, established in 2007 and specialising in supply chain management of agricultural commodities, placed the second lowest offer for two lots; and Ameropa AG, a Swiss company, founded in 1948 and specialising in agri-business, production, logistics, marketing and distribution, came second on the third lot.


“The winners of each of the lots will be announced after the financial evaluation is concluded,” said Gojjam Tadele, a senior communications expert of the Service.

The ongoing tender for the supply of wheat is the fifth this fiscal year, all of which have been used to stabilise the market.


Inflation of food items was 11.4pc last month, and this was a result of the increase in the prices of teff, rice, fruits and vegetables. Following the depressed supply of flour, bakeries such as Shoa have begun selling bread in the market at their desired price, shunning the government’s subsidised wheat system.

Recently, the government awarded Wifag Mabrouk General Trading, a Dubai-based company established in 2012, to supply 400,000tn of wheat. Wifag Mabrouk won the deal by offering the lowest bid of 108 million dollars, 11 million dollars lower than the next lowest offer.

The sixth tender for the supply of 600,000tn of wheat will be opened on April 29, 2019. It will be used to support people affected by drought and internal displacement. The Service floated the tender on behalf of the National Disaster Risk Management Commission, the government body responsible for providing support to those affected by human-made or natural disasters.

The nation produced 4.6 million tonnes of wheat in the last fiscal year while importing another 1.7 million tonnes to meet demand.


Although such purchases are not ideal, the country has no other option to meet the demand but to import from abroad, according to Wassie Berhanu (PhD), an expert in agricultural economics.

“When production is low and demand is high,” said Wassie, “the government has to take this and other market stabilisation measures to protect consumers.”

The recent bid was opened a week after the arrest of the top level executives of the Service suspected of corruption related to 400,000tn of wheat that was awarded to Promising International. Yigezu Daba, former director general of the Service; Solomon Betre, former procurement process owner at the Service; and Jonse Gedefu, former deputy director of the Service, are among 10 suspects who were arrested.


PUBLISHED ON Apr 20,2019 [ VOL 20 , NO 990]

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