Olam International among the three firms to win major wheat supply in Ethiopia

ETHIOPIA – Three overseas companies have won a bid to supply 600,000tn of wheat to Ethiopia at US$127.9m that will be used for market stabilisation and emergency responses.

This is in addition to the 500,000 tonnes the Ethiopian government will procure from Australia and Russia for US$150m after entering into a state to state level of agreement.

Martina Mertens Sample, a Turkish company, secured the largest share of the project to supply half of the wheat for US$65.9 million dollars.

London-based company GemCorp Commodities Trading was awarded the contract to supply a third of the grain for US$40.73 million, while Olam International, a Singaporean company, will supply 100,000tn of wheat for US$21.27 million.

The purchases are sought to replenish the stocks of the Ethiopian Trading Business Corporation with 400,000tn of wheat and the remaining 200,000tn is for the National Disaster Risk Management Commission (NDRMC).

The main aim of the procurement is to respond to various natural disasters, such as floods and landslides, according to Debebe Zewede, director of public relations at the National Disaster Risk Management Commission.

“It will also be used for those who receive daily assistance,” said Debebe.

The winning companies were awarded the contract on May 16, 2020, after being deemed technically and financially qualified.

The agreement will be signed on May 25, 2020, if other bidders do not file grievances within the mandatory five-day waiting period, reports Addis Fortune.

This procurement was delayed by one month due to COVID-19, since it has resulted in lockdowns in many countries, according to Worku Gezaheng, acting director of procurements at the Service.

In the last fiscal year, Ethiopia procured 1.7 million tonnes of wheat from four international companies.

Ethiopia is among the top three wheat producers in Africa, with wheat accounting for 20pc of the nation’s total cereal production.

More than 90pc of Ethiopia’s wheat production is grown on small farms without irrigation, most of which are in the highlands, according to the Global Agricultural Information Network (GAIN) report.

Due to the irregular productivity and reliance on rain fed agriculture, they supplement the demand deficit by importing the commodity from other countries.

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