Sunday, June 16, 2024
BusinessSesame shortage hits commodity market

Sesame shortage hits commodity market

Following the supply shortage of sesame within the national commodity exchange market, exporters have been hit the hardest. This comes as its production as well as marketing, which is handled by the Ethiopian Commodity Exchange (ECX) faces a slew of challenges, among them low production which has worsened in recent months, according to exporters The Reporter spoke to.

The conflict in Tigray region, one of the largest producers of sesame in Ethiopia, also resulted in the supply gap. In a parliament session held last week, ECX disclosed to MPs that the whereabouts of 670 quintals of sesame is still unknown.   

“Producers of sesame in the region have not been able to sell their items to exporters because of a supply disruption as a result of the fighting in the region,” said head of corporate communications of the Exchange during the session. 

According to traders, change in the amount of item being traded on the floor of the Exchange has been observed since last month.

“Much has changed in the last month. A month ago, much of the products were superior and 5,000 to 7,000 quintals of the item were marketed daily. Now, it is just a mere 300 to 600 quintals,” said Kibrom Tilahun, a representative of Wonberta Import and Export Plc.

- Advertisement -

“Since there is a shortage of items, it might be a single exporter who purchases and exports the product,” he added.

A number of exporters complained that the conflicts in various parts of the nation have affected the market. For Kibrom, it has been two weeks since he received his supply.

A manager of an import-export business that exports sesame who spoke to The Reporter on condition of anonymity said the issue is of having a sector whose supply and demand are unbalanced and has such a small quantity and too many exporters competing for it.

The business of seed export remains a complex transaction despite a set of prices from ECX but middle-men often influence the setting of prices by hoarding their products when the price does not favor them.

Another sesame exporter also mentioned the qualities offered by the commodity exchange do not match the high quality his clients from many nations demand.

Kibrom thinks there is still a large market for such products and is hopeful things will change for the better.

“While much of the uniform-like prices are set by the Ministry of Trade, it all comes down to some actors in the sector, who supply and withhold their prices to take advantage of the differences of prices that change weekly and with little warning,” he said.  

Another import-export manager who spoke to The Reporter on condition of anonymity mentioned the competition at ECX is tough.

“The representative at the exchange has to be smart, fast, and experienced. Someone without adequate and practical experience cannot do the job and understand the shortcomings of the system as well as the dire needs of exporters,” he said.

Last week, ECX announced that it had facilitated the trading of 115,000 tons of sesame in the first half of the existing fiscal year, achieving 112 percent of its target.

- Advertisement -spot_img


- Advertisement -


More like this

Unprecedented budget proposal draws parliamentary fire, exposes inequity, inefficiency

It was with his usual nonchalance that Finance Minister...

Loan exposure worries give rise to barrage of NBE directives

Central bank Governor Mamo Mihretu has introduced a series...

Bills look to grant broader investigative powers over money laundering, terrorism financing

MPs fear bills aim at muffling opposition parties Lawmakers...

Influx of fuel business license requests prompts investigation

The National Fuel Reform Steering Committee has launched a...