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Pakistani company secures 2.6 bln birr wheat deal

Pakistani company secures 2.6 bln birr wheat deal

Shakeel & Company—Pakistani based commodity supplier, finally won the supply of 400,000 tons of wheat at a total price of 96.4 million dollars (2.6 billion birr), The Reporter has learnt.

Public Procurement & Property Disposal Service has awarded the wheat supply contract after the winning company managed to give the lowest price in comparison to companies who are bidding.

The tender which was floated in four lots, each having 100,000 tons of wheat, was conducted by the Agency on behalf of the Ministry of Trade.

The purchase is mainly intended for the local market as part of the effort to stabilize food prices.

This particular supply has attracted companies well-known in the Ethiopian wheat market. Companies such as Promising International, Hakan Agro, ADM International and Amropa AG, gave their respective offers; however, Shakeel, a newcomer to the Ethiopian market has managed to prevail over the rest.

It has managed to give least offers of USD 240 per ton for lot 1 and 241.5 for the rest three lots.

On the other hand, the total offer made by Sheekl was 700 million birr lower than another purchase made a month ago, and having equivalent quantity.

The offers made by Sheekl also came at the time where international price of wheat is showing a slight increase.

According to the United Nations Food and Agricultural Organization (FAO), there is a slight increase in the price of wheat in the last one month.

“International wheat prices moved only little in November amid ample global supplies and strong export competition. The benchmark US wheat (No.2 Hard Red Winter, f.o.b.) increased slightly, averaging USD 220 per ton, 3 percent up from the previous month and 16 percent higher than in November 2016,” reads part of a report on FAO’s website.  

For the previous purchase which was made a month ago, Promising International and Intrade made the winning offers at a total price of 3.3 billion birr. This purchase, unlike the latest was made for mitigating the impact of the drought.

It was meant to feed close to 5.4 million people out of the 8.5 million people who are affected by the drought. From the total 8.5 million people, the rest 3.1 million are assisted by the support coming from World Food Program and other donors.

The purchase was divided into three lots based on their amount – 200,000 metric tons, 100,000 metric tons and another 100,000 metric tons. The three lots are set to be distributed among five different warehouse destinations in the country: Adama, Komobolcha, Dessie, Mekelle and Dire Dawa.

Unlike previous purchase, the latest wheat supply and its final delivery will be at Djibouti Port. After that, the wheat will be brought to the country and will be distributed to more than 5,000 bakeries and 300 flour mills.

The latest purchase also came at a time when food inflation is increasing alarmingly.

Its latest contract allows Sheekl to break into the Ethiopian market which was rather dominated by other suppliers for a long time.