Millers express scare over market driven wheat shortages

(Photo: Anteneh Aklilu)

Ethiopian Millers Association express concerns over shortage of wheat supply to their factories.
According to the association, which has more than 220 member factories, it usually buys wheat from different parts of the country based on the season and the type of wheat including from Bale, Awash, Arisi, and Gojam.
According to Muluneh Lema, president of the association, based on the season, factories had been expecting wheat supply from Bale, Oromia Region’s largest wheat producer, however, the wheat market has been rattled by interruptions for the past five or six weeks especially in the capital Addis Ababa.
“Beside wheat price increasing by more than one thousand birr per quintal it has been more than five weeks since the factories that produce flour and related products stopped getting wheat from the market,” said Muluneh, adding that, “A number of factories are cutting their production of flour.”

(Photo: Anteneh Aklilu)

As the association indicated previously one quintal of wheat used to be sold for 4,700 birr which now has jumped to 5,700 birr.
“We have also confirmed through field observations that Ethiopia has increased its wheat production,” said the president explaining that he is confident that there will be no shortage of wheat production this season.
However, due to the interruption of the wheat market, the president alluded that factories are also buying smuggled wheat at high prices.
A week ago, Prime Minister Abiy Ahmed attended the national wheat export launch program in Bale Zone, Oromia Region as part of the government’s plan to halt import of wheat and embark on the export of its own wheat production.
According to the Ministry of Agriculture from this year’s autumn harvest season, 112 million quintals and 52 million quintal of wheat production from irrigation and summer season is expected to be reaped.
Therefore, the forecasted production rate indicates that there will be excess production in terms of domestic demand which is estimated at 97 million quintals with an additional 32 million quintals of wheat being projected for export.
Muluneh stated that although they are very supportive of Ethiopia starting to export wheat, they do not think that the export trade will create a problem for the domestic wheat market as this year a high level of production has been produced at the national level.
“Even those who were getting the supply in different ways or using from their stock may not continue for long if the situation is not solved quickly and it may affect the supply of bread and other products,” the president indicated.

(Photo: Anteneh Aklilu)

Ever since the problem occurred, the association has been informing the Ministry of Trade and Regional Relations and the Ministry of Finance by letter, and they believe that the efforts they are making by going to the front will yield results.
It is said that one of the reasons of the unintended wheat trading problem is related to the inability to properly implement the Oromia region’s wheat trading guidelines.
According to Muluneh, in a meeting held in Adama with the relevant government, it was decided upon for unions to supply wheat to factories from farmers at rates of one quintal of wheat with 3,200 birr and to sell it to factories for 3,381 birr.
“When we follow up on which unions we are working with, the unions did not get enough financing, and after that it almost fell flat with unclear information,” said Muluneh.
Muluneh, emphasized that production in itself was not the thorn in the scenario but the way how the market process is run.