The Ethiopian Sugar Development Agency (ESDA) is expected to sign an agreement on Monday, April 27, 2010, with the UK based ED&F Man Sugar Limited Company for the supply of 40,000tn of sugar.
The company agreed to supply a tonne of sugar for 565.50 dollars. This is lower, by almost 300 dollars, than the price of the contract awarded to the UK company and Louis Dryfus of Sweden, four months ago, for the supply of 50,400tn of sugar at 831 dollars per tonne.
“This is the time of the Brazilian production year, and the Indian market is also in a good position,” Habtamu Regassa, head of Foreign and Local Trade Directorate at ESDA told Fortune.
According to Habtamu this is the reason the international sugar price came down.
The delivery of the sugar from the UK company is planned to arrive in May and June.
In addition to this, the agency will float a tender to buy 60,000tn of sugar.
“We will sign an agreement with the winner of the tender, within one month’s time,” Habtamu said.
The height of the sugar crisis occurred in February, when the price of sugar reached 16 Br to 18 Br per kilogramme.
In light of the problem, the ESDA planned to import 800,000ql of sugar from abroad this fiscal year. Still, the Ministry of Trade and Industry (MoTI) ordered it to import an additional 500,000ql of sugar.
The three state owned sugar factories, Metehara, Wonji Shoa, and Fincha produce three million quintals of sugar annually.
However, the country’s sugar demand rose to 4.6 million quintals per year; this being the reason for the government to import sugar.
Last week, on Monday, April 19, 2010, the ESDA opened a tender to sell 70,000ql of sugar with the average price being 1,288 Br per quintal.
“Currently, the market has eased since we flooded it with 386,000ql of sugar,” Habtamu said.
This is the largest amount of sugar ever to be distributed in the Ethiopian market within one month, according to Habtamu.
Apart from the private sector, the two state owned marketing enterprises, Merchandise and Wholesale Import Trade Enterprise (MWITE) and Ethiopian Fruit and Vegetable Market SC (Etfruit), are also engaged in the trading of sugar.