US based trading house, Osirius Group, produces a performance bond after two months delay to supply the badly needed political commodity, sugar, in the nick of time.
In the bid opened early November last year, the company which is relatively new to the Ethiopian market was selected to supply 200,000 metric tons of sugar owing to its lowest bid offer compared to other two bidders.
For the past several weeks, the Ethiopian Sugar Industry Group, the commodity client, laid in patient wait for the firm to produce its performance bond to open the letter of credit (LC).
According to the information Capital obtained from Reta Demeke, spokesperson of the Group, it has been revealed that the company has come up with the performance bond.
“The precondition that was supposed to be finalized locally has been fully concluded and the LC has already been opened to harmonize the import,” he said, adding, “the only thing that remains is for the company to finish the process that it has with its bank abroad.”
In the bid documents, the Group expressed its desire for the commodity to be transported up to Djibouti through eight shipments at 25,000 metric tons each. However it stated that the first batch was expected to reach on the third week of November and the last one at the end of January 2023.
Owing to the delay, the dispatching period has been revised explained the spokesperson, “The sweat will be transported in four rounds at 50,000 metric tons each.” Meanwhile he did not provide details when the first batch will arrive at Djibouti since the company is expected to conclude the process with its foreign bank, “we hope the company will settle the process in the coming few days and start the shipment soon.”
On the FOB price offer, Osirius stated that it will supply the commodity on a letter of credit (LC) at sight at USD 545 per ton, USD 522 on 12 months on differed LC and 18 months differed LC. The bid winner cited that the loading port will be Brazil.
The Singaporean company, Agrocorp, which won the last sugar bid opened a year and half ago, offered USD 549.95 for payment at sight and USD 608.75 for 12 months differed LC.
ED and F Man, a British commodity firm, offered USD 850, USD 900 and USD 1,100 per ton for payment at sight, 12 months and 18 differed LC respectively.
The Group, a public enterprise, has accepted Osirius’s offer to supply the sweat with 12 months differed LC scheme with the total cost of the 200,000 metric tons of sugar at USD 11.4 million.
In the 2021/22 budget year, the Group floated several international bids, but was unable to buy the commodity in the year, except the 100,000 metric tons that was supplied early in the year.
Currently, four of the eight sugar mills are in operation, while the market is filed by the commodity currently supplied through francovaluta. For instance, about a month ago, a vessel called Pegasus 01 arrived in Djibouti with 16,000 metric tons of sugar.