Wednesday, February 28, 2024
BusinessSecurity concerns cripple sesame trade

Security concerns cripple sesame trade

Unresolved security concerns have resulted in a drop in the volume of sesame traded at the Ethiopian Commodity Exchange (ECX), according to its executives. The volume of sesame traded at the floor of ECX plummeted by over 62 percent in the last three years.

The two-year conflict in northern Ethiopia, which recently ended with the signing of the cessation of hostilities agreements in Pretoria and Nairboi, has led to a major decline in sesame production, reducing the volume of the commodity traded through the Ethiopian Commodity Exchange (ECX).

The majority of the cash crop is grown in the northern and northwestern regions, which border Sudan and Eritrea. The two-year war rendered farming nearly impossible for farmers.

Sesame seed is one of the most widely cultivated oilseed crops in the country, accounting for 30 percent of total oilseed production. Despite being one of the most actively traded commodities on the ECX for over a decade, the last two years has been disappointing in terms of volume.

The Exchange traded nearly 300,000 tons of sesame in 2019. In the subsequent years, the volume dropped significantly, first to 269,000 and then to 229,000.

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Last year, 112,000 tons of the commodity were traded in total. In the last eight months, the Exchange has traded close to 88,000 tons of sesame, falling short by 25,000 tons of the previous year’s total.

Bereket Meseret, chief operations officer of the ECX, says the conflict in regions where sesame is widely cultivated is one of the primary causes of the low production.

The production of sesame requires a great deal of labor. Once the crop has been cultivated, it must be harvested quickly to prevent loss due to spoilage. The unrest in the regions has resulted in a reduction of the labor force that would have otherwise been employed to work the fields, affecting the ability of growers to collect and mobilize resources.

13 years had passed since the ECX began trading sesame crops. Currently, four varieties of the commodity are traded on the Exchange: Humera, Gonder, Mixed sesame, and Wollega.

The choice of crop by the farmers is also attributed to the poor performance. As a result of last year’s favorable prices, farmers in sesame-growing regions have been compelled to switch to mung bean and soy bean production.

The infertility of the land is another contributing factor, according to Bereket.

“Repetitive land use without crop rotation results in low productivity. It is natural and recommended to revitalize shifting cultivation and other mechanisms.” He says the production of the cash crop has decreased significantly over the past four years.

Meheret Amare, an oil seed farmer from West Gondar, Metema, stated that despite cultivating a large quantity of crops, the disparity between production and selling prices has created a problem.

“There is a fluctuation in price. For example, the price of soybeans last year was significantly different from this year. Due to the high cost of labor, materials, and services required to cultivate cash crops, the price difference has a significant impact on the grower,” Meheret said.

The unrest in Sudan was one of the obstacles he faced while cultivating oilseeds in the region. The appropriate stakeholders, he believes, must comprehend and provide the necessary support for such growers.

Ethiopia is the world’s 23rd largest exporter of oilseeds and Africa’s second largest exporter of cash crops.

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Video from Enat Bank Youtube Channel.

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