Africa-Press-Ethiopia<\/p>\n
Back in November, Ethiopia unveiled two deals to buy deeply discounted wheat from suppliers that seasoned traders had never heard of. A website named for one of the companies listed a German address that didn\u2019t exist and appeared to use stock photos of models.<\/p>\n
Two months on, it remains a mystery who was behind the deals or what their motivation was, especially as Ethiopia says it hasn\u2019t lost any money. One thing is clear though: no wheat has been delivered. The government has now canceled the tenders and plans to start over.<\/p>\n
It\u2019s an embarrassing blunder that could have ramifications for a country in desperate need of food. Ethiopia relies on more than 1 million tons of wheat imports a year to feed its people; the two canceled tenders together represented 600,000 tons. Global wheat prices have risen since the deals were initially awarded, meaning it will probably have to pay more now.<\/p>\n
Ethiopia\u2019s grain-tender process has for years been dogged by cancellations and corruption allegations, as well as putting strain on much-needed foreign-exchange reserves. The nation had already postponed or canceled tenders over the course of last year. That\u2019s especially a problem for a country where some 11 million people were seen in need of food aid by the end of last year.<\/p>\n
Ethiopia\u2019s farming industry last year suffered from the worst desert-locust infestations in decades as well as the Covid-19 pandemic. At the same time, conflict in parts of the country displaced tens of thousands of people, adding to widespread food shortages.<\/p>\n
\u201cThere is no doubt that there is a major food security crisis,\u201d said Tedd George, founder at Kleos Advisory, a U.K.-based adviser on African markets. \u201cEthiopia has lost a number of tenders beforehand. It may have been that they have had difficulty finding more established, more respected traders to provide wheat.\u201d<\/p>\n
A spokesperson for the Ministry of Finance this week said that while the two tenders were canceled, the nation has been able to meet its needs through other purchases and domestic supply, though couldn\u2019t comment further.<\/p>\n
The two tenders awarded in November were for the purchase of 400,000 tons from Rosentreter Global Food Trading and 200,000 tons from Martina Mertens, at a combined value of about $117 million. However, the companies were unknown to nine experienced international grain traders surveyed by Bloomberg.<\/p>\n
The Public Procurement and Property Disposal Service this month said it canceled the tenders because the companies didn\u2019t follow through with the deals and plans to reissue them. Since the tenders were awarded in early November, benchmark futures have climbed about 10% to $6.72 a bushel in Chicago.<\/p>\n
When asked about Rosentreter\u2019s authenticity in November, PPPDS Director-General Tsewaye Muluneh said that while it was the first time the new company had participated in tenders, it had passed the PPPDS\u2019s checks.<\/p>\n
Two Companies
\nThere are reasons to question the firms\u2019 legitimacy. Rosentreter and Martina Mertens offered wheat much cheaper than other tender participants. The German address that was stated on a website for Rosentreter doesn\u2019t exist, phone numbers wouldn\u2019t connect, an email failed to deliver and personal biographies used what seems are stock photos of models.<\/p>\n
Rosentreter\u2019s website no longer works, and Bloomberg couldn\u2019t identify one, or locate contact details, for Martina Mertens.<\/p>\n
It\u2019s not clear who would stand to benefit from the failed tenders. Tsewaye said Ethiopia hasn\u2019t lost any money in the two tenders, with the companies even putting up a bond payment to participate. She wouldn\u2019t elaborate further.<\/p>\n
The Ministry of Finance didn\u2019t respond to phone calls, emails and text messages over the past two months seeking comment on the authenticity of the companies involved and whether the awards were a blunder.<\/p>\n
The government held a monopoly on wheat purchases until early last year when, as part of new state reforms, it started allowing some private companies to import as long as they use their own foreign currency. There\u2019s no public list of who is eligible to import.<\/p>\n
It seems the country still needs more food. The Catholic Relief Services said Ethiopia has asked it for assistance, with distribution already underway. The World Food Programme also confirmed it\u2019s assisting the government in procuring wheat.<\/p>\n
Ethiopia\u2019s National Disaster Risk Management Commission said 11.1 million people needed food aid last year and that it\u2019s working on figures for 2021. The country is currently buying about 700,000 tons of wheat and plans to purchase another 300,000 tons later this year, said Mitiku Kassa, head of the agency.<\/p>\n
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Africa-Press-Ethiopia Back in November, Ethiopia unveiled two deals to buy deeply discounted wheat from suppliers that seasoned traders had never heard of. A website named for one of the companies listed a German address that didn\u2019t exist and appeared to use stock photos of models. Two months on, it remains a mystery who was behind […]<\/p>\n","protected":false},"author":84,"featured_media":1838,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,3],"tags":[241],"class_list":["post-1837","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-community","tag-africa-press-ethiopia"],"yoast_head":"\n