Brokers, hoarding, loose regulations and reduction in food production are being blamed for a spike in the prices of onions, garlic and wheat.
One kilo of onions, which previously went for 15 birr has doubled to 30 birr and a kilo of garlic has skyrocketed to 180 birr. The slow procurement of wheat also caused the local wheat market to sell it for a quintal at 2,300 birr which was 1,000 up to 1,200 birr a month ago.
A trade expert says another problem is banning heavy trucks from driving in Addis during the day as well as instability and low production but brokers are taking advantage of the situation for their own greedy gain.
Alemu (name has been changed) a city market inspection employee says Ethiopia’s agriculture must be revolutionized. 
“Agricultural commodities required for industrial use need to cost less for the products to penetrate not just the domestic market, but also the international market. It is pertinent to state that this is beyond what our aging farming population can provide. So, there is an urgent need for the modern practice of agriculture that requires the efforts of our educated youth.”
“When agriculture is made attractive, youth will go into it and produce food in large quantity, which will reduce the cost of food items. We have good climate and weather,” Alemu said.
The Addis Ababa Trade and Industry Bureau said brokers and hoarders are the main problem.
Debre Densa, Basic Commodity Distribution expert at the bureau said there must be good market linkage between the producer and the consumers.
“We can’t say that all the consumer products rise with less production, if you look around the country some products are determined by the brokers not the demand and the supply game and as a bureau we are working with cooperative unions to supply the product which helps us to decrease the products in some time but brokers are still challenging us by breaking our chain with cooperative unions,’’ he said.
Onion,Garlic prices stink Suddenly
This year 91 new roads expected
The Ethiopian Roads Authority (ERA) disclosed that construction of 91 roads will begin in this fiscal year. They will be paid for by an already earmarked 46.3 billion birr in the 2012 budget year, of which 38 billion birr comes from the government treasury.
Habtamu Tegegn, ERA’s Director General said that 48 road projects are new and more than half are projects in the pipeline or projects that are delayed, adding that the Authority made no new projects last fiscal year.
According to the Director General, the government allotted a huge budget for road sector. In fact, it was three times the amount of the previous year but still more needs to be done.
For the last 21 years, the sector swallowed more than 256 billion birr. The government treasury paid for 83 percent of this to build 16,000km of road networks.
“We should follow other mechanism to boost the road coverage by engaging other actors as a single government agency cannot do it alone,” the director said.
“The federal government road network data registered close to 30,000 km. The coverage is not enough for the country. Ethiopia has an area of 1.1million square kilometers so the government must invest more in the sector until the coverage reaches 500,000 km, he added.
The nation hopes to boost this road coverage to 220,000 Km by the end of the second edition of the Growth & Transportation Plan (GTP II).
As to the Director General, ERA and regional road authorities need more clear communication in an attempt to build more asphalt roads.
Poor performance related to the contractors, and preparation of documents, beside issues related to compensation and demarcation are some of the challenges in road construction.
Out of the planned roads one connecting Addis Ababa with Debre -Birhan, Addis Ababa with Jimma, Addis Ababa with Chancho and the already started Mojo -Hawassa toll roads are some of them. The Abay Bridge that has a 21.5m width will also begin this fiscal year.
For the last fiscal year, the government allotted 28 billion birr and used its entire budget on many projects that were delayed.
“The huge budget allocation for the road projects alone will not address the problems as it takes more time and finding a new mechanism of contracting roads aggressively is needed,” the director said.
ECX to trade cotton
The Ethiopian Commodity Exchange (ECX) will begin trading industrial products for the first time in its 11 year history. The long awaited warehouse receipt financing will also be introduced in the 2019/20 budget year.
ECX that has been operating since 2008 was engaged in the trading of major agricultural commodities by introducing the exclusive trading of coffee, which earns one third of hard currency in the export market.
Currently ECX is facilitating the exclusive trading right for coffee, sesame seeds, and others like green mung bean and soybean. However, nonexclusive products like maize, wheat and haricot bean are also traded on the floor.
Since its establishment ECX traded agricultural products that are mainly used for consumption.
According to Wondimagegnehu Negera, CEO of ECX, the trading floor will start trading cotton during the coming harvest season. “The country is currently following the agro processing manufacturing sector and that will be supported by us. We will include the trading of cotton in our electronic market,” the CEO said at the press conference held on Friday August 2 at the ECX headquarters.
The exchange also targeted to introduce such kind of industrial products step by step as per its expertise and experience.
Netsanet Tesfaye, Public Relation Head at ECX, told Capital that studies were conducted to include cotton at the trading floor.
One of the expected products to be included on the trading floor from industrial products is sugar when the under construction projects are fully operational. However it will be decided in the future.
This would be the first time non edible products are being exchanged on the trading floor and even for the supply for local market. Currently the exchange mainly focus on the agricultural commodities that are exported, meanwhile trading for coffee for local supply is also held on the floor.
Currently the number of textile and garment industries is growing in the country, while the major share of inputs, cotton for textiles, is covered by imports.
On the other hand the price volatility discouraged local cotton growers despite the country’s suitable and ample land and environment for cotton production. Experts on the sector said trading the product at ECX might improve the sector marketing and encourage local producers to cultivate the product and even save the hard currency that is allocated for the import of cotton.
The electronic exchange has also targeted trading niger seeds, which is one of the oilseed products exports to different markets like the US for birds feed.
Wondimagegnehu said that niger seeds will be included at the trading as non mandatory. The oilseeds is mainly cultivates at the central part of the country in the surroundings of Addis Ababa. Wondimagegnehu also stated that the exchange has also targeted to commence the pilot project in providing loans for farmers by warehouse receipts. The idea has been circulating in the past but it was not implemented yet.
According to the CEO, warehouse receipt financing will be provided on some selected products during the budget year.
In the current budget year, the trading floor has targeted to trade 35.6 billion birr worth of 788.910 tones of agricultural commodities.
For the 2018/19 budget year 711,850 tones of commodities have been received by ECX warehouses with the achievement of 93 percent of the target and three percent higher than the preceding year.
In the year ECX traded 681,845 tons of commodities with the increment of one percent from the target and 3 percent more compared with the 2017/18 budget year.
Coffee takes the highest share by 45 percent and followed by sesame seeds that stood at 34 percent. Regarding value it has been targeted to trade 30.3 billion birr worth products, while the actual amount registered 33.8 million birr with 3 percent increment.
Besides the performance registered in the past structural improvement is crucial for the modern electronic trading activity, according to Netsanet. He said that to meet the target of modern facility ECX is currently constructed modern warehouse facilities to meet the international standard.
Export decline continues
Ethiopia’s revenue from exports continued to decrease as the country failed to hit its target for the just completed fiscal year. The country earned only 2.67 billion USD.
Though the government planned to earn 4.32 billion USD from exports, it achieved only 61 percent of its target.
Ministry of Trade and Industry’s communication director Wendimu Flate said that the underperformance in meat, dairy products, spices, leather and leather products, cattle, inputs of some chemicals, construction and mining especially gold exports achieved below 50 percent of their target.
Agriculture contributed 74 percent of the exported share which is 2.1 billion USD while manufacturing and mining contributed 453.60 and 46.18 million USD in revenue respectively.
“The manufacturing and mining sector’s underperformance really hurt us,” Wendimu said.
In terms of export destination by country the USA takes the lead followed by Somalia and the Netherlands out of the 146 trade partners.
The failure of increasing productivity and reliance of raw agricultural commodities in addition to the contraband border trade across the country and lack of meaningful diversification of export items has been often mentioned as a reason for the poor performance of Ethiopia’s export sector.
Lack of input for the manufacturing companies, which often couldn’t get hard currency on time and power shortages are reasons for manufacturing’s struggle.
The countries export performance has begun to decrease starting from 2016, where goods with a value of around 3.16 billion USD were exported from Ethiopia followed by export performance that registered 2.83 billion USD in 2017.
The Ministry plans to earn 4.69 billion USD for this fiscal year. Agriculture will still be relied on the most at 3.2 billion USD, which is 70 percent of the total exports.
