The government’s order to prioritize fertilizer over wheat, when being transported from the Port of Djibouti to Ethiopia has meant increased demurrage costs for wheat cargo and delay in getting wheat to the local market.
The Ethiopia Trading Business Corporation (ETBC) is responsible for distributing the wheat being imported to stabilize the market and supplied to basic institutions like higher educational facilities. However, in the past few weeks the government has given priority to importing fertilizer to be distributed to farmers before the coming rainy season which begins in June.
Sources say a huge amount of wheat has been stored at the port in Djibouti called Doraleh Multipurpose Port (DMP). Currently the wheat transported to the centre is about 20 percent of what was expected, according to sources.
Sources affiliated with Promising International, one of the major wheat suppliers for the government, told Capital that at least 2,700 tons of wheat should be transported every day but the current status is very low.
The sources claimed that lack of coordination in the procurement process has created disorder on the transportation of the country cargo from the port to the centre.
“Due to the delay at the port, which is a very hot area, the wheat may face infestation at the warehouse so this will need to be disinfected which will cost more. Then there are additional charges for demurrage and scarcity in the local market,” sources said.
In late April the Federal Transport Authority in a letter signed by Abdissa Yadeta, Director General of the authority, indicated that transporting companies should fully focus on the transportation of fertilizer before the rainy season comes.
The corporation’s acting head Tariku Berasu has also asked the Ministry of Transport, to use some of the trucks to carry out the transportation of wheat.
Tariku told Capital that they have agreed with the Ministry that some of the trucks should transport wheat. “Currently wheat is being transported from the port but it is not as much as we want,” he said. He added that the issue is not only related with fertilizer and wheat but sugar as well. That cargo is being transported in a similar manner into the country.
He said that the corporation faces extra charges due to the demurrage but he does not have further information of insect infestation.
On Wednesday May 22 Promising wrote a letter to the corporation indicating any damage would be handled by the corporation. “There have been many letters sent to you on a daily basis raising concerns about slow truck deployment from your side and warning about the possibility that infestation may develop, I regret to admit that advice has not been taken into consideration by ETBC and today we have been informed that living insects have been found at the warehouse leading to the freeze of cargo uplift,” the letter stated.
“Since our contract is governed by cost and freight all liability has been passed to ETBC after goods passed the ship’s rail in discharging the port,” it added.
Experts said that lack of coordination or some sort of sabotage that the government is unaware of may be the reason for the current incident.
“Some sort of liability has to be put on those engaged in the procurement process. They apparently did not learn a lesson from last year’s incidents,” sources told Capital.
“The case is directly related with politics since wheat is distributed for daily consumption via bread factories’ millers. If the product is delayed at the port, local market will be affected by shortage,” a source said.
Tariku said that the case may be directly related with lack of planning and coordination of assigning transporters or buying some of the products early.
Tariku further said that currently the corporation is supplying the full quota to institutions and some wheat to other consumers.