Ethiopia tenders bid for supply of 400,000 tonnes of wheat to ease demand

ETHIOPIA – The Government of Ethiopia has issued a new international competitive tender to buy 400,000 tonnes of milling wheat as it seeks to fill the gap of wheat supply in the local milling and baking industries.

According to a recent report by the Global Agricultural Information Network (GAIN) report from the Foreign Agricultural Service of the U.S. Department of Agriculture (USDA), the government said that milling wheat is intended for bread subsidy program.

“Most bakeries that receive subsidized wheat flour are reportedly operating way below their capacity.

This shortfall is partly due to grain shortages and logistics challenges to quickly move consignments from Port of Djibouti to warehouses in Ethiopia,” the USDA said in a statement.

However, only designated flour mills, mostly in and around the capital city, can buy the subsidized wheat from the government at a discounted price, mill the wheat, and then sell the flour at a fixed price to select bakeries in Addis Ababa.

According to the report, fresh bids for the wheat supply are due by April 19, with delivery of the contracted wheat expected to begin by June/July.

This comes few months after the government had awarded a similar contract to three international grain suppliers for the supply of the commodity at between US$308.5 and US$299 metric per tonne in February 2019.

Bunge SA, Amropa AG and Archer Daniels Midland Co. were selected by the Ethiopian Trading Business Corporation through the state procurement agency, Public Procurement and Property Disposal Service (PPPDS) for the supply of 400,000 metric tons of milling wheat.

However, following a complaint from a Dubai-based supplier with the lowest offer ($270 per tonne), the government reversed course and awarded the contract to the Dubai company, the USDA said.

The government of Ethiopia majorly receives wheat from the Black Sea region, with Romania, Russia, Ukraine, and Bulgaria as the top suppliers of which USDA said it expects the supplier to source most of the contract from the Black Sea region due to price.

Ethiopia is still suffering local supply shortages following the effects of a prolonged drought that cut domestic production this year and issued the tenders to curb growing wheat shortages in the country.

According to the government of Ethiopia’s Customs Commission, Ethiopia imported nearly 1.7 million tonnes of milling wheat in 2017-18.

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