Thursday, April 18, 2024
BusinessThe Sugar Saga: Shipment to Kenya stranded at Moyale

The Sugar Saga: Shipment to Kenya stranded at Moyale

Once again the Ethiopian Sugar Corporation (ESC) has found itself in a middle of a controversy as sugar export worth USD 2.2 million, destined to Kenya, was stuck at Ethio-Kenya border after the Corporation lost contact with the purchasing company. 

The 44,000 quintal of sugar stuck at the border for the past 45 days exposed the sugar shipment to wastage given the high temperature at the border of Moyale.

The controversy came after the Corporation’s agreement with a Dubai based company called Agri-Commodities & Finance. FZE to sell the stated amount of sugar to the company. The company agreed to buy the sugar through its sister company based in Kenya-ETG. In return, the company has agreed to pay USD 2.2 million dollars to the Corporation.

After passing through the needed bank requirements, the purchasing company Agri-Commodities agreed with a local transport company called Bright Cross Border Transporting Company to carry the sugar consignment from Wonje Sugar Factory to Kenya. 

The transport company has assigned 110 vehicles to transport the sugars to Kenya. The transporting company in return received 50 percent down payment for its service.

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However, after reaching at Moyale border with the shipment, the vehicles were prohibited from entering into Kenya.

According to reports, the sister company in Kenya was nowhere to be found which prompted the Kenyan authorities to prohibit the shipment to enter into Kenya.

In a letter issued by the Corporation on September 18, 2017 to Kenya’s Agriculture and Food Authority, CEO Endawek Abite expressed his regret to his counterpart regarding the whole import process and the conditions of the shipment stranded at the border.

“Concerning 4,400 tons of sugar to be exported to Kenya, we are writing to inform and express our regrets that the importation process at your side is not going smoothly as expected,” said Endawek in his letter.

“We noticed that the sugar lifting work is faced with lengthy clearance process and unsynchronized logistics arrangements,” he said.

Further, he explained that this has exposed the sugar consignment to severe damages.

He also said that his Corporation is facing a delay on the USD 2.2 million in payment which is due following the delivery of the sugar consignment.

The letter also claims that the corporation has submitted all the required export related documents to the buyer’s bank. “After the necessary export documents were raised and submitted to the buyer, AGRI COMMODITIES & FINANCE.FZE seems to be delaying our payment…without sufficient reason,” he petitioned the authorities.   

Nevertheless, the main problem appears to be with Bright Cross Border and Agri Commodities.  According to the public relation director at the corporation, Gashaw Aychilum, the problem has nothing to with corporation and that it should receive its due payment according to the contract.

Bright demands compensation for delays caused at the border, Gashaw told The Reporter, “and it has made its stance clear on that”. However, transporters demand of getting a new contract from buyer stating the new terms or a bank guarantee as to the financial obligation agreed up on before mobilizing ahead to Kenya.

Nevertheless, Agri-Commodities is yet to agree about giving the transporter new contract, Gashaw added. And said, that if the two could not agree, the last resort will be for the consignment to return to Wonjie.           

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