Addis Fortune (Addis Ababa)
February 27, 2007
Posted to the web February 27, 2007
Wudineh Zenebe
Addis Ababa
The importations of fertilizer to Ethiopia, contrary to the increasing national demand, is suffering from two constraints; international prices both for Urea and DAP is souring, while the number of companies and cooperative entering the competitive bidding is shirking by the day.
The sixth-round of public tender opened on Wednesday, February 21, inside the Tea and Coffee Building, Ras Mekonnen Avenue (the road from Stadium to Mexico Square) has revealed that the price of Urea per ton reached 388.70 dollars, a significant increase from an average of 310 dollars last year. Even more alarming, this is a price 40 dollars more than what the national committee, under the Ministry of Agriculture and Rural Development (MoARD), had projected earlier in the year.
In the series of tenders held so far this, four bidders had appeared to provide 75,000tns, while the other five tenders had only one or two bidders.
The sixth round was opened with only one bidder offering to supply 25,000tns out of the 75,000tns of Urea the national committee wanted to import during this round. The state-owned Agricultural Inputs Supplies Enterprise (AISE) is to import this amount, internationally supplied by Yara France.
The increase in international prices of fertilizer, attributed to increasing global demand, has scarred these cooperatives away from participating in these tenders.
Having 19,000 farmers under its wing, this Cooperative has been one of the 17 that were actively involved in the fertilizer market; it has won 25,000tns of DAP during the third round of tender during the current Ethiopian fiscal year. An average price of DAP in January 2007 was 348.89 dollars per tonne, up by almost 22.00 dollars from last year.
It was the second time this year that the national committee issued tenders for Urea: the first, in January 2007, had no participants, while last week's drew the state Enterprise as the lone bidder.
AISE has already started to transport from the Port of Djibouti the 25,000tns of DAP it had won, offering 327.20 dollars per tonne back in November 2006, at a cost higher than last year. According to reliable sources in the Enterprise, management has decided to add 50 Br per quintal when distributing it to farmers. Mebratu G. Egziyabeher, general manager of AISE, has declined to comment on the volatility of the fertilizer market when approached by Fortune.
The federal government is considering various options to offset the price shocks. These include reducing by half the three percent service charge banks charge when opening letters of credit, and the reduction of interest on loans to fertilizers from 7.5c to 5.25pc. They also cross their fingers that transport cost from the Port per kilometre per tonne would reduce in the meantime.
February 27, 2007
Posted to the web February 27, 2007
Wudineh Zenebe
Addis Ababa
The importations of fertilizer to Ethiopia, contrary to the increasing national demand, is suffering from two constraints; international prices both for Urea and DAP is souring, while the number of companies and cooperative entering the competitive bidding is shirking by the day.
The sixth-round of public tender opened on Wednesday, February 21, inside the Tea and Coffee Building, Ras Mekonnen Avenue (the road from Stadium to Mexico Square) has revealed that the price of Urea per ton reached 388.70 dollars, a significant increase from an average of 310 dollars last year. Even more alarming, this is a price 40 dollars more than what the national committee, under the Ministry of Agriculture and Rural Development (MoARD), had projected earlier in the year.
In the series of tenders held so far this, four bidders had appeared to provide 75,000tns, while the other five tenders had only one or two bidders.
The sixth round was opened with only one bidder offering to supply 25,000tns out of the 75,000tns of Urea the national committee wanted to import during this round. The state-owned Agricultural Inputs Supplies Enterprise (AISE) is to import this amount, internationally supplied by Yara France.
The increase in international prices of fertilizer, attributed to increasing global demand, has scarred these cooperatives away from participating in these tenders.
Having 19,000 farmers under its wing, this Cooperative has been one of the 17 that were actively involved in the fertilizer market; it has won 25,000tns of DAP during the third round of tender during the current Ethiopian fiscal year. An average price of DAP in January 2007 was 348.89 dollars per tonne, up by almost 22.00 dollars from last year.
It was the second time this year that the national committee issued tenders for Urea: the first, in January 2007, had no participants, while last week's drew the state Enterprise as the lone bidder.
AISE has already started to transport from the Port of Djibouti the 25,000tns of DAP it had won, offering 327.20 dollars per tonne back in November 2006, at a cost higher than last year. According to reliable sources in the Enterprise, management has decided to add 50 Br per quintal when distributing it to farmers. Mebratu G. Egziyabeher, general manager of AISE, has declined to comment on the volatility of the fertilizer market when approached by Fortune.
The federal government is considering various options to offset the price shocks. These include reducing by half the three percent service charge banks charge when opening letters of credit, and the reduction of interest on loans to fertilizers from 7.5c to 5.25pc. They also cross their fingers that transport cost from the Port per kilometre per tonne would reduce in the meantime.
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