Sunday, July 21, 2024
BusinessDefaults tarnish pulse, oilseed exports

Defaults tarnish pulse, oilseed exports

Defaults in exports of oilseeds and pulses has blemished Ethiopia’s image, costing it major export destinations, exporters said.

Although Ethiopia has diversified the oilseed and pulses market destinations to the likes of the UAE, Yemen, Singapore, and other Asiatic nations, it has lost major destinations such as Turkey, Vietnam, Indonesia, Pakistan and Indonesia, according to exporters who spoke to The Reporter.

The issue of defaults is caused by both sides; the suppliers and buyers, with some buyers terminating contracts after the commodities are delivered to ports. And on the other hand, sellers or suppliers have not delivered the commodities based on the contractual agreements entered, and some have even absconded.

Edao Abdi, deputy president of the Ethiopian Pulses, Oilseeds and Spices Processors Exporters Association (EPOSPEA) said the problems which existed in the oilseed and pulses industry, are sourced from both the government and the exporter’s side.

The security and instability in the areas where the commodities are produced, the different price of the commodity in the local and international market, and the unethical trade practice from both the supplier’s and buyer’s side are some of the challenges exhibited in the sector.

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China has historically been the top destination for Ethiopian sesame exports, although this is changing, as the Far East nation diversifies its imports and turns to other African markets. Ethiopia’s exports have been declining steadily over the last four years, as noted by the exporters.

According to Edao, China was importing half of Ethiopia’s sesame four to five years ago. “However, countries like Burkina Faso, Guinea, Chad, Nigeria and Sudan are replacing Ethiopian products in the market,” he said.

Kassahun Gofe, State Minister at Trade and Regional Integration, in a general assembly of the Exporters Association held this week, explained that oilseed exporters have to provide quality and competitive commodities to export to destination countries and capitalize on the opportunity existed in the international market.

The substandard commodities have tarnished the image of the country, while the unnecessary treatment of pesticides and harmful chemicals in the commodities forced export destination countries to ban imports from the country, according to the state minister.

Edao blames some exporters for giving not enough attention for the sector and stay in the business to generate forex.

The lowering of forex retained by exporters is also discouraging many from staying in the sector, according to him.

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