Monday, October 2, 2023
BusinessService to procure wheat to stabilize market

Service to procure wheat to stabilize market

Following months of controversies with regards to the procurement of wheat, the Government of Ethiopia is to procure another batch of wheat amounting to 400,000 tons.

It is to be recalled that a couple of months ago, a Company called Promising International Trading Co. Dmcc – a major supplier of wheat to the Ethiopian market – was awarded to supply 200,000 metric tons of wheat with a total cost of 1.39 billion birr.

It was back in June, 2018 that Promising won the contract to supply the 200,000 metric tons of wheat. During the biding process, Promising agreed to supply the wheat and later failed to do so. Three months after Promising was asked to supply the wheat, the entity that issued the tender, in dismay, retendered the purchase.

At the time, Promising attributed its reluctance to supply the wheat to the contract offered by the Service regarding freight prices dragging the supply behind. Mainly, the company claimed that the Ethiopian Shipping and Logistics Service Enterprise (ESLSE) came up with a new freight price which was not mentioned during the financial opening of the bid, as Promising’s representatives told The Reporter a couple of months ago.

However, in a letter sent to The Reporter by ESLSE, the claims by Promising were said to be unfounded.

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Following this, the Service brought the issue to the attention of the Agency where the Service accused Promising for not respecting its contractual obligations of supplying the wheat. At the time, in addition to confiscating a bid bond worth USD 18,000, the PPPDS asked the Agency to penalize Promising.

Later on, the Public Procurement and Property Administration Agency, upon the compliant submitted by Service, has barred Promising from participating in any bidding process in the country with the decision coming into effect for the coming one year.

This decision will force Promising not to compete for the latest bid to purchase 400,000 metric tons of wheat as well as similar wheat purchases for the coming one year.

The latest purchase will be used for the purpose of market stabilization where the wheat will distributed for flour factories as well as bakery houses.

FAO’s report states that, “International prices of wheat declined in November, 2018 with the benchmark US wheat (No.2 Hard Red Winter, f.o.b.) averaging USD 232 per ton, down by more than three percent from its level in October but still up 5 percent from the corresponding month last year.”

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