ETHIOPIA – Bunge S.A, Amsterdam based subsidiary of Bunge Limited has made the least offer to supply 35,000 tonnes of wheat for US$10.51 million meant for humanitarian assistance programme deemed Productive Safety Net Program.
The program targets to reach 10 million food-insecure people, spending US$3 billion a year out of which 14% is funded by the Ethiopian government and the remaining by nine unmentioned donors.
The government which secured the funding from International Development Association (IDA) for the tender had announced the bid through the Ministry of Agriculture, attracting interest from eight companies.
In the long run, AddisFortune reported only three companies including Bunge SA, Hakan Agro DMCC and Promising International Trading Company submitted their offers.
Bunge S.A offered to supply the wheat in bits to different warehouses and this will be done in a months’ time after the issuance of the award, said Solomon Betre, director of Procurement Services and Chairperson of the tender committee.
AddisFortune indicates the market was experiencing shortages in wheat supply leading to 55% price hike on a quintal of wheat, which is wheat price increased from US$39.90 to US$61.66 for every 100kg.
In March 2018, instability in food prices and food inflation in cereals including wheat was on the rise reaching as high as 20%.
As a result, the Ethiopian government has been endeavouring to procure wheat through the Public Procurement & Property Disposal Services (PPPDS) since the beginning of the fiscal year in a bid to remedy the situation.
However, the procurement process is reported to have had its own setbacks with three wheat procurement tenders having been cancelled due to reasons including controversy in the process and bidders’ inability to fulfil performance guarantee bonds.
The initiative was appraised by different individuals commenting it to have the possibility of exacerbating dependency by the food-insecure families especially in the rural Ethiopia.
“As a sustainable solution, the government has to make major policy changes,” said Messay Mulugeta (PhD), a lecturer and researcher for nearly two decades at College of Development Studies at Addis Abeba University (AAU).