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Corporation saves USD 21.1 mln in fertilizer purchase

The Ethiopian Agricultural Business Corporation has saved USD 21.1 million (607 million birr) from fertilizer purchase for the 2019 harvest year, The Reporter has learnt.

This was a result of a purchase of Urea fertilizer where the supplier agreed to reconsider its prices after it was declared a winner via an open international bid.

It is to be recalled back in September, 2018, the Corporation opened a fertilizer bid worth USD 400 million (11 billion birr). The bid was meant for the purchase of 1.125 million tons of fertilizer. At the time, the bidders gave USD 400 million to supply 500,000 tons of Urea (divided in 10 lots), 450,000 tons of NPSB (divided in nine lots), 75,000 tons of NPS (divided in one lot) and 100,000 tons of NPSZnB (also in one lot).

In this regard, a company called Agri Commodities and Finance ZTE gave a total offer of around USD 179.67 million for the supply of 500,000 metric tons of assortment of fertilizer types.

Moreover, for the rest of the 625,000 metric tons of NPS, NPSB and NPSZnB fertilizers, the Moroccan fertilizer giant – OCP – gave the winning total offer of USD 177.32 million. At the time, OCP also gave the lowest offer on the rest of the bid to supply NPSZnB amounting to USD 34.64 million.

In total, the sum least offer by the aforementioned companies was around USD 417 million, with OCP listing the lowest price for most of the supply.However, following the bid it was difficult for the government to purchase the fertilizer at the total offer made by the suppliers. So the government has decided to renegotiate with the suppliers for a price cut.

In this regard, Agri Commodities and Finance ZTE decreased it price by USD 21.1 million and agreed to supply with USD 158.6 million.

“This will benefit the end users which is the framers,” read the statement issued by the Corporation.

Out of the purchased fertilizer, the Corporation so far has distributed 542,166 quintal to farmers union with a total price of 702.4 million birr.

On the other hand, given the same financial constraints, it is to be recalled that the Corporation,after almost four months of back and forth, decided to let OCP to supply some portion of the total fertilizer.

At the time, OCP was asked to supply 200,000 metric tons of fertilizer composed of different kinds of NPS fertilizers. In the same bid, the company has agreed to reduce its initial total offer to supply Urea by USD 17 million.