Companies bag US$120m contract to supply wheat

ETHIOPIA – Promising International and Intrade are going to supply 400,000tns of wheat to feed the 5.4 million people affected by the drought and in need of urgent assistance.

The companies agreed to provide the wheat at the cost of 120 million dollars.

Promising won the bid under lot one to supply half of the amount for 59.8 million dollars, while Intrade will provide the remaining for 60 million dollars, according to the announcement by Public Procurement & Property Disposal Service (PPPDS) on November 3, 2017.

The Service procured the wheat on behalf of the National Disaster & Risk Management Commission (NDRMC).

For the initial tender 43 companies showed an interest to buy the bidding document. But, only six submitted their financial offers.

These were Phoenix, Hakan Agro DMCC, ADM International SRMA, Bunje SA and the two winning companies.

The victorious companies submitted the lowest offers during the financial opening held two weeks ago.

Out of the total consignment, 180,000tns of wheat will be delivered to the Adama warehouse while Kombolcha, Dessie, Meqelle and Dire Dawa will share the remaining 220,000tns.

Promising, a company engaged in trading wheat, sugar, sorghum, peanuts, groundnut oil and oilseeds in Ethiopia, Dubai, Ukraine, Syria, Egypt and Tunisia, is expected to deliver the wheat between December 2017 and January 2018.

Intrade, a consulting and sales agent company, operating in international grain trade since 1994, has to deliver the consignment between February 2018 to March 2018.

In addition to this procurement, the service is working on procuring 400,000tns of wheat following the order from the Ministry of Trade (MoT) for market stabilisation.

The initial plan was to purchase half of the current amount. But due to the increasing demand for wheat from the milling companies, a further increment was required.

The financial opening for these orders will be after three weeks, according to Assefa Solomon, Public Relations Deputy Head for the Service.

This procurement will cost the government over three billion Birr.

Previously, the Service attempted to purchase 70,000tns of wheat for drought-affected areas as requested by the Ministry of Agriculture & Natural Resources (MoANR) with funding from the World Bank (WB).

But, it is still pending as the bid security of the companies has elapsed while awaiting WB’s approval to award suppliers.

Due to a surge in the prices of cereals including wheat, the food inflation rate has peaked to 16pc in the past months. These procurements are expected to stabilise the escalating food prices in the country.

Despite the improvement in wheat production, its imports had hiked to 2.5 million tonnes in the past year from 661,386tns in 2015.

Ethiopia produces four million tonnes of wheat annually, showing a five percent increment in the previous fiscal year.

The situation is disappointing for the economist with more than 25 years of experience.

“The government has to focus on strategic crops,” remarked Tadelle Ferede (Prof.). “It should set imperative solutions to break out of this pattern by investing more in agriculture.”

Addis Fortune

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