Ethiopia’s government does not have wheat in stock needed to distribute to over 60 wheat flour companies throughout the country.
Under normal conditions 645,000 quintals of wheat are distributed to the nations’ flour companies. However, according to information that Capital obtained from the Ethiopian Grain Trade Enterprise (EGTE) there are less than 35,000 quintals of wheat for July distribution slated to go to trade bureaus, universities, prison administrations and selected three flour companies.
Over 1,400 bakeries in Addis who were getting subsidized flour previously will be directly affected. They will be forced to purchase flour on the open market.
Only 60 bakeries in Addis will get subsidized flour this month. Others will likely increase bread prices in line with higher wheat prices.
Wheat has gone up from 1,000 birr to 1,500 birr per quintal in the last six months. Wheat procurement delays are partly behind the wheat scarcity.
Bekele Solomon, Basic Consumer Distribution Head at the Addis Ababa Trade Bureau told Capital that the bakery has the right to sell their products at higher prices if they cannot get the subsidized wheat from government.
“We can’t force the bakeries to sell at our price if they don’t get subsidized wheat they deserve to be able to compete fairly.’’
EGTE said the problem will not be solved till the wheat gets to the government’s stock.
Currently 350,000 metric tons of wheat is being shipped and 1.1 million metric tons is in the procurement process.
The Ethiopia Trading Business Corporation (ETBC) is responsible for distributing wheat. They have imported it to stabilize the market and supply it for institutions like higher education facilities. In the past two months the government has prioritized importing fertilizer to distribute it to farmers for the rainy season. This has led to demurrage hikes for wheat transported from the Port of Djibouti and delays getting it to the local market.