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The complex public tender process mostly undertaken by the PPPDS on behalf of the government have been facing challenges which sometimes cause nationwide shortage of wheat.
Since last year, the country has been going through rampant wheat shortage because of problems in the tender process which also proved the fact that the country cannot be self sufficient without the import.
It is to be recalled that, last year tender and retenders involving 400,000 metric tons of wheat have caused nationwide shortage. At the time, the government was also forced to cut wheat quotas distributed to factories by half. Just few weeks back, as the result of recent wheat shortages, a well-known bakery shop like Shoa Bakery, were accused of doubling the prices of bread at the retail end of the market.
However, bakery houses like Shoa were getting their wheat supply from the government of Ethiopia at a subsidized price. Nonetheless, following the failure of the government to supply the wheat on time, the company, in the interest of guaranteeing continued supply of bread in the capital, decided to look into the private sector for sustainable wheat supply. And as a result, the change of supplier has resulted in a significant cost escalation for bakeries and hence leading to the doubling of the price of bread.
Following pressure from the government to supply the wheat, the supplier – Promising International DMCC, a Dubai based company, which is major supplier of wheat to the Ethiopian market – has shipped 75,000 metric tons of wheat back in March, 2019 and delivered it at the Port of Djibouti. However, as the result of shortage of trucks to load the wheat from the port the wheat is still stranded and the country is still suffering wheat shortage.
“Promising also brought additional 30,000 metric tons to the port,” according sources. However, the wheat is yet to be loaded and there are still shortages of trucks.
“Over the years I have been involved in the sector I have noticed that there is a serious challenge in the whole procurement process to importing wheat,” an industry source whose name has been withheld upon request told The Reporter.
For instance when the government buys wheat they always go for the least price despite the fact that the supplier could be new and may not have the capacity to supply the wheat, a representative of an international wheat supplier company based in Addis told The Reporter.
The whole evaluation process during tenders use low standards which sometimes causes problems, he said.
“For instance when we join the Ethiopian market of wheat supply and began to compete we have to submit a number of documents such as audit report, track records as well as financial documents,” according to another source representing a wheat trading company.