Ethiopia purchases 500,000 MT of wheat from Australia, Russia worth US$150m

ETHIOPIA – The Ethiopian government has entered into a state to state level agreement with Australia and Russia to supply a total of 500,000 metric tons of wheat to Ethiopia for US$150 million.

Majority of the purchase order will be undertaken by Australia to supply 400,000 metric tons of wheat for US$120 million, with payments to be made in instalments in a year.

While Russia will supply the remaining 100,000 metric tonnes for US$30 million. Currently, Export and Import (EX-IM) Bank of Russia and the Commercial Bank of Ethiopia (CBE) are sorting out payment modalities.

According to Tsewaye Muluneh, director general of the Public Procurement and Property Disposal Service, a state to state grain trading agreements is said to have saved the government hard earned disposable cash, since the global procurement process involves multiple middle players. 

The purchases are sought to replenish the stocks of the National Disaster Risk Management Commission (NDRMC) and the Ethiopian Trading Business Corporation, in which the previous receives 400,000 metric tons of wheat, reports the Ethiopian Reporter.

To that effect, the procurement   agency has opened an international bid to purchase 600,000 MT of milling wheat out of the 800,000 MT needed for the current fiscal year.

In the first round of bids floated a few months ago, the procurement service has been able to award purchase agreements for 200,000MT and is waiting on delivery of shipments.

However, the 600,000 metric tons was a rebid, which was cancelled back in February after the bid was contested. Some 11 suppliers have qualified for technical evaluation, which mostly focuses on the quality of wheat.

The financial requirement focuses on the bidders’ interest to provide credit finances on basis of FOB shipment and least cost pricings.

Despite on-going efforts to purchase food grains, the impact of COVID-19 pandemic has put pressure on logistics as countries continue to ban travel and impose lockdowns.

Prime Minister Abiy Ahmed (PhD) has sounded an alarm on how dire the situation has become and purchasing food grain will be a difficult task ahead.

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