Friday, June 14, 2024

Government announce interest to buy high volume basic commodities


Ministry of Trade and Industry (MoTI) invited foreign traders to import a given amount of basic commodity by using their own foreign currency. The latest expression of interest (EOI) stated the volume of the products that the government wanted to be imported by overseas companies.
On the expression of interest issued on April 8 the ministry expressed its interest to import 18.1 million quintal of wheat, 1.73 million quintal of rice, 104.3 million liters of edible oil, and 3.2 million quintal of sugar.
It has been recalled that the Ministry of Finance invited interested suppliers for basic commodities that can import using their own foreign currency that will be paid within two years period.
Experts said that the current expression of interest document is different because it states the volume that the government wants to import.
Experts on the sector said that in the previous call issued by Ministry of Finance the government called suppliers to show their capacity than indicating its demand.
Experts say that the time is difficult to get basic commodities since the coronavirus pandemic challenges countries and their economy all over the world.
The International Grain Council expects a sharp upturn in near-term demand for rice and wheat-based foods.
They said that the price of basic commodities is rising; rice, which surge on higher level in seven year and wheat price has increased by 15 percent in second half of March.
The Ministry of Trade and Industry EOI which is open to all overseas companies who meet the criteria indicated that the purpose is to solicit applications and short list multinational companies to supply the basic food commodities and/or industrial inputs to the Ethiopian market.
According to some of the criteria stated, the shortlisted companies shall agree either to invest, which might be partially, or repatriate the cost incurred for importation of basic food commodities together with the margin above two years from the date of import.
The summation of EOI will be close on April 23.
Experts on the sector told Capital that they have doubts about the fruitfulness of the EOI. They argued that two years for repatriation is not feasible as a business.
Companies want to transact the money they invested more than one, while the current interest of the government, the money will be idle for two years that could not be accepted by any manner and shall be affected by global price hike or inflation.
Previously the State Minister of Finance Eyob Tekalegn, told Capital that there are companies coming to involve on the new scheme.
He ridiculed the argument of some experts that the government might not get companies to be involved on such kind of scheme.
“We have got several interested overseas companies to get on the business,” he told Capital few weeks back.
The government is getting on this new trend considering to tackle basic commodity supply shortage, fight the inflation and access fresh hard currency, that is short for the country.
Currently, only Ethiopians and the diaspora are legally allowed to involve on the retail or wholesale business in the country.
Meanwhile on its way to be member of World Trade Organization and Continental Free Trade Agreement Ethiopia is expected to easy such restrictions for foreign companies.
The government is the major importer of wheat at a cost of close to USD one billion every year. According to experts, the volume of wheat stated on the EOI shall cover the demand for about one and half year.
Edible oil is also mainly imported by the government even though there are over two private and political party affiliate companies that are allowed to import the product.
At the same time import of sugar is monopolized by the government so far. But the policy and regulation of sugar that is coming following the decision to privatize some sugar millers drafted the importation of the sweat by private operators who will buy the factories.

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