Gov’t buys 400,000 MT of wheat from Australia

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Negotiating to add 200,000 MT more

Public Procurement and Property Disposal Service (PPPDS) has agreed with Australian government to procure USD 120 million worth high quality wheat, while the final go head will be approved by Ministry of Finance.
Early this year a delegation led by Eyob Tekalgne, State Minister of Finance, that include heads of PPPDS, Ethiopian Trading Businesses Corporation, and Ethiopia National Disaster Risk Management Commission visited Australia, Russia and Ukraine to conduct government to government (G2G) meetings.
On these visits PPPDS agreed with countries to buy strategic commodities directly by cutting out middle men to tackle challenges like high price and delays on procurements.
Based on that the Service strike a deal with the Australian government to procure 400,000 metric tons of durum wheat, which is highly quality than milling wheat with USD 120 million.
Tsewaye Muluneh, Director General of PPPDS told Capital that the price is a little bit higher than other conventional wheat products. Experts said that durum wheat is high quality than milling wheat and that is the reason the cost is a bit higher than the conventional product that the country currently imports.
She said that as per the agreement the amount of USD 120 million will be settled within a year time.
“We are not new to importing durum wheat from Australia,” an expert on the sector told Capital. In the past a pasta factory located in Dire Dawa was using this high quality durum wheat that is also called as pasta/macaroni wheat imported from Australia.
Tsewaye added that in relation with the COVID 19 outbreak the government is working with the Australian government to import an additional 100,000 metric ton wheat at the cost of USD 30 million.
Tsewaye said that the final decision will be given by the Ministry of Finance.
Currently Canada, United States, France, Ukraine and Australia are the top five exporters respectively.
The Director General said that to undertake similar moves from other countries is under process. “The bank to bank relation to commence similar direct procurement with Russia is on the process,” she says, adding that on this scheme the Russian Export Import (EXIM) Bank will represent the country and the state owned Commercial Bank of Ethiopia (CBE) will undertake the process on this side.
“This week CBE has come with its response that will put the process on another step,” she explained. The procurement from Russia would be 100,000 metric tons.
“We shall buy the grain on the G2G manner since we do on other procurements like fuel,” Eyob said few months ago about the decision to buy wheat from governments directly.
PPPDS believes that the direct procurement shall bypass long bidding processes.
The government allocates over half a billion dollar to import wheat. Currently the government is aggressively working to cut the import and introduce massive lowland irrigation scheme targeted to cut the import within three years as of this budget year.