Ministry of Trade and Regional Integration (MoTRI) discloses that following its announcement on taking measures on exporters who are hoarding export commodities, the fleet has begun to expand.
Experts in the sector stated that the export commodities that is mainly followed up by MoTRI has slowed down in the past few months that forced the ministry to introduce new directives and revise the previous ones on the aim to accelerate the commodities that it claims are hoarded by exporters in different warehouses located in the surrounding of Addis Ababa.
For instance a week ago MoTRI revised the sesame seeds and white pea beans directive and the pulses directive. On the new amendment it has enforced traders to export commodities in a month’s time since the ministry wrote a letter.
Experts said that at MoTRI there is an assumption that export is not done as per the expected volume.
However, traders expressed their concern citing that the government does not understand the concept of stocking, “Government concludes that the commodities that are stored for certain periods of time with different volumes as hoarding but that is not the case, we are stocking for different reasons, including finding market and expectations of better price rate.”
They added that stocking and hoarding should be clarified, meanwhile the ministry dismissed their concern.
“A single harvest season has to be clearly stated. For instance oilseeds shall be stored for up to two years, while when it comes for pulses the perfect period is not higher than six months,” exporters that Capital spoke to explained.
According to experts, after this period, its market advantage is lesser in value and even reduces its quality when it comes to pulses.
As per the trading proclamation the harvest season is one year, while since exporters bought the product from ECX they have to expected to ship within three months time as per the directive at MoTRI. “It is vague because if the exporter does not manage to get buyers in this period or if the price shows reduction, he shall store the product until the perfect time comes, so as to capitalize on the opportunity. In this case it is difficult to say that such kind of exporting is illegal or criminal,” experts in the sector said.
The amount that the ministry mentioned is very small and even highly dispersed to several exporters.
Sources said that around the investigation in Burayu there are exporters who stored tens of thousands of oilseeds and pluses and similarly there are exporters with on hand of thousands of export commodities like the place in Adama but most of the volumes seen by the government investigation is about hundreds of quintal of the commodity that is lesser than a container disbursed to over 300 exporters.
Experts argued that most of the companies are working with banks to buy the commodity for export so they prefer to ship the product on time to settle their loan as soon as possible rather than hoard the commodity and pay unnecessary bank interest.
The government should support exporters to export commodities as fast as possible rather than trying to take the commodities by stating it as illegal hoarding and involving against the law.
Higher officials may not seen technicalities in detail so the lower officers might mislead them to which they ought to be conscience.
Regarding the issue Kassahun Gofe, State Minister of MoTRI, rejected the concern of the traders.
He said that the ministry has undertaken its own investigation and that it knows the amount of commodities hoarded in every single warehouse.
Meanwhile some exporters said that the volume that is stated by the government as hoarded in warehouses is in quintal.
Kassahun strongly stated that the volume that is known under the investigation is 235,000 metric tons.
He added that it is not the issue of stocking or hoarding by definition, “there is not confusion on what hoarding really is, the commodity must be available for the market as per the rules and procedures that are clearly stated by the country’s trading and export law.”
He told Capital that every week there is a consultation with exporters or their representatives and every move by MoTRI is discussed with exporters.
“For instance the latest revision of the directives has been discussed with exporters before the amendment,” he added.
He said that there was a trend in hoarding products which was witnessed as opposed to accessing the market and exporting the goods.
“The government’s major role is facilitating and expanding new market destinations, and strengthening the existing markets with suitable conditions. On the other hand the export is expected to carry out its parts,” he said.
“We have observed that the legal market is pressured by those who want to abuse it, so we are strongly working to correct that and currently the situation is improved and we will continue to accelerate the benefit of the country and the export earning against the illegal traders and the contraband,” he said.
“Ever since improvement measures were taken by the government, the consignment flow has increased,” he added.
He reminded that there was a behavior or longing in expectations that the government might introduce new policies and improve the retention law that was imposed few month ago, “such kind of expectations are the major reasons for hoarding commodities, which is totally unacceptable.”
Some exporters have also appreciated the role of the new appointed State Minister, who was assigned to the position very recently. As they said, he is working tirelessly to improve challenges, while on the state ministers end, he said that the measures are taken by the system and that the directions flow starting from the export coordinating committee.