Ethiopia stirs wheat market with million tonne tender: traders

Ethiopia is seeking a million tonnes of wheat in one of the biggest import tenders for the food staple in recent years as it grapples with poor local harvests linked to the El Nino weather pattern, European traders said.

There was scepticism in the market, however, about the landlocked east African country’s logistical capacity to take such a massive tonnage, equivalent to what it typically imports during a year, the traders said on Thursday.

The tender calls for offers of optional-origin wheat including freight costs to be submitted on Friday. Shipment is due within four months of any purchase, which is expected in about a week, they said.

“The big issue is logistics,” one trader said. “It’s hard to say how the tender is going to turn out.”

Ethiopia wants the wheat to be shipped to neighboring Djibouti, the port that handles most Ethiopian imports. The trader said a separate Ethiopian fertilizer import tender could strain unloading capacity at the port.

The scale of the latest wheat tender partly reflected an unsuccessful bidding round in September, when Ethiopia sought to buy 222,000 tonnes, traders said. Ethiopia, which has a population of about 95 million, is also facing a shortfall in supply from local grain harvests that have been hit by lower rainfall, blamed on the El Nino weather pattern.

United Nations agencies said last week that 8.2 million people were in need of food assistance by September, 3.5 million more than estimated a month earlier. Ethiopia’s tender called for wheat with 12 percent protein and 26 percent wet gluten, traders said.

The tender was being held by the Public Procurement and Property Disposal Service (PPPDS), which was seeking 600,000 tonnes, and the ministry of agriculture that was seeking 405,000 tonnes, they said.
Source: Reuters