Tuesday, February 27, 2024
BusinessSpike in local sesame price infuriates exporters

Spike in local sesame price infuriates exporters

A quintal of sesame now costs 11,000 birr

The drastic rise in price in local sesame trade over the last few weeks is concerning the processors and exporters association that work on the crop.

Businesses were able to trade sesame based on the market price for more than two weeks, after the Ministry of Trade and Regional Integration lifted the ceiling price placed on the crop.

The latest action of the Ministry causes a market disruption, encouraging farmers to charge a price higher than even the international market price.

Prior to the Ministry’s decision, the price of a quintal of sesame was set at around 8,800 birr. The crop was also being traded in the Ethiopian Commodity Exchange window at the same price; however, the price increased by at least 3,000 birr per quintal in the following days.

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In a letter written on December 6, 2022, the Ethiopian Pulses, Oilseeds, and Spices Processors Exporters Association advised its members to be cautious of the situation, stating that higher prices would result in a loss or hoarding due to a lack of buyers if the price is higher than the international market.

 “When trying to export the sesame sourced at higher prices locally, you might not get buyers thus you will be forced to hoard and face a loss,” the letter reads. “You shouldn’t buy the crop at a price that isn’t above the international market.”

Signed by the association’s general manager, Tayech Petros, the letter further warned member processors and exporters that failure to export the acquired sesame due to the low prices, legal actions by the Trade Ministry would follow.

Since last year, the crop’s export performance has been declining, with thousands of tons discovered stored in exporters’ warehouses. Oilseed and pulse exports did not perform as well as the government projected in the first quarter of this year.

Explaining to the Parliament his office’s first quarter performance last Thursday, governor of the National Bank of Ethiopia (NBE), Yinager Dessie (PhD) shared his concern over the declining export performance of some commodities, which includes oilseeds and pulses.

Sisay Asmare, the association’s president told The Reporter that the concern comes as a result of inappropriate trade behavior by some exporters. “The solution isn’t also reinstating the price ceiling as it is a free trade. Exporters only have to make informed and responsible decisions when trading.”

According to the weekly price list released by the Trade Ministry, a ton of sesame was traded between USD 1,600 and 1,700, which does not surpass USD 165 per quintal. When compared to local prices, sesame should not cost more than 8,500 birr per quintal. However, it is sold for as much as 11,000 birr a quintal.

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Video from Enat Bank Youtube Channel.


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