ETHIOPIA – The government, which has been reassessing the ban on the importation of palm oil by private companies, in effect since May 2011, is to lift the ban beginning August 6, 2015.
The lifting of the ban will still preclude the participation of previous major importers such as Get-AS International, Camel Trading Enterprise and Country Trading.
These were among the six major importers along with Al-Sam International and AHFA Plc, who had collectively imported 13 million litres of palm oil in 2011, which the government took from the Port of Djibouti, compensating them only for their costs, effectively taking over the business.
Companies that are in the edible oil manufacturing sector or in the process of implementation are the only ones chosen for the task, according to Kebede Chane, minister of Trade. These companies will also have the privilege of accessing foreign currency for the import.
Since the first weeks of April 2015, the Ministry of Trade (MoT) had been reconsidering the return of the private sector to the importation of oil. State Minister for Trade, Ali Siraj, had stated then that the idea had always been up in the air, “bearing in mind the country’s free market policy”.
Subsequent to the government’s failure to regulate the edible oil market with a price cap introduced in 2011, it took exclusive control of palm oil importation.
Currently, the MoT has selected five private companies to engage in the importation of oil; AHFA Plc, Biftu Adugna Business S.C., Al-Sam International, Belayneh Kindie Import & Export (BKIE), and Hameressa Edible Oil S.C.
AFHA Plc is an import/export and food processing company, founded by Jemal Ahmed. Harmeressa, a producer of refined edible oil, established in 1998 and acquired from the government by Ethio-Asian Industries Plc in 2014, is a subsidiary company of East African Holding S.C. Biftu Adugna and BKIE specialise in oil seeds and pulse import.
They were founded in 1994 and 2008, respectively. Another company, Al-Sam, which has been in the business for the last 16 years, was founded by Sabir Argaw.
Furthermore, three endowment enterprises will also be part of the business. These are Wondo Trading & Investment Plc, Guna Trading House Plc and Ambassel Trading House Plc, which focus in Southern, Tigray and Amahra regions, respectively. Alle Bejimla, the state-owned wholesaler, will also be involved in the import.
Once imported, the distribution channel will remain intact. Palm oil wholesalers will receive the goods from the importers and distribute for service providing institutions, retailers and consumers’ associations, from which consumers can buy.
In the coming two weeks, MoA will determine the quota for all nine importers it has selected, as well as the profit margin they will be allowed, revealed Kebede.
Currently, 37,800 metric tonnes of palm oil are distributed across the country weekly. A consumers’ association at Kebele 02/03 of Kirkos District, near Global Hotel, receives 20 cartons of palm oil, which is sold out in less than a day. The carton can hold four jerry cans of five litres and three at six litres.
“Rarely do we receive 150 cartons of oil, which can last a maximum three days,” revealed a salesperson at the trade union.
This association faces similar problems in all the five shops it owns in the same kebele.