Challenges and opportunities were the apt themes at the 2nd International Conference on Pulses,
Oilseeds and Spices held from November 28 to 29th, with around 70 delegates from 15 countries participating; up by more than double from last year’s conference which only entertained 32 delegates.
The annual conference was organized by the Ethiopian Pulses, Oilseeds and Spices Processors Exporters Association (EPOSPEA) together with the Ministry of Trade.
Haile Berhe, President of (EPOSPEA) said the sector could be an even bigger boost to the economy if work is done from the start, such as vigorously and regularly giving the best seeds to farmers as well as ensuring that the transaction chain is fast and cost effective.
“In this regards there are works started by the Ethiopian Commodity Exchange (ECX) but most come directly from the farmers, through various parties” said Haile, adding that the most important aspect in this regard is developing the capacity of the exporter to enter the outside market, to create relationships with foreign buyers, and finally diversifying export destinations; that can be done with the cooperation of the government and exporters.
EPOSPEA says the main destinations for pulses, oilseeds and spices number at about 70 countries, with some products like sesame being a standout in this regard. Ethiopia is becoming a number one exporting country in this regard, although production in China, Sudan, and India are way bigger than Ethiopia.
Its main export destinations are places like China, India and various Middle Eastern countries, and some in Europe and North America.
Haile further said that his association expects that from this conference, buyers from foreign countries and exporters can connect and eventually sign contract agreements, as well as benefiting the country in terms of conference tourism and image building.
He also said the dependence on cash crops doesn’t have to come at the expense of land fertility, and as such there are various ways to maintain fertility or reclaim it, such as crop rotation, the provisioning of affordable and appropriate seeds, and the use of feeds for the soil.
“921 million USD expected from exports in the current fiscal year”
Yakob Yala, State Minister of Trade, who made a keynote speech on the opening day of the conference said the contributions of the oil seeds, pulses and spices sector last Ethiopian fiscal year was about 21 percent of overall export earnings.
The Ethiopian government says the export sector in Ethiopia is attaining promising results with a nine year average growth of 25 percent, with the contributions of this sector being no less than 20 percent of total achievement.
EPOSPEA expects in this budget year that 921 million USD in exports will be earned during the current Ethiopian fiscal year 2012/13. The target for this sector at the end Growth and Transformation Plan is about two billion dollars.
The association says the performance of the sector is growing steadily reaching about 660 million USD last fiscal year 2011/12, although it said challenges remain; such as the quality of the products, weak market chains, and lack of cost efficient and fast delivery of products to market destinations.
No adverse impact on Ethiopia’s food items
Berhane Hailu General Manager of the state owned Ethiopian Grain Trading Enterprise (EGTE) said countries like Sudan may consume 60 to 70 percent of their production of these agricultural produces locally, but Ethiopia’s food culture is to consume teff and other non-related food items.
Ethiopian Grain Trade Enterprise was established under the name of “Grain Board” in 1949. The enterprise was reorganized in 1999 for the purpose of purchasing grain, oil seeds, and pulses both for local wholesale and export. The Enterprise has diversified its business to include the coffee export trade since 2009.
“Oilseeds and pulses other than sesame like niger seed and linseed are normally industrial products and raw materials” said Berhane adding that there is no big share from local staple food items, like teff, wheat and maize, which aren’t being exported at the moment.
EGTE says these products are helping meet Ethiopia’s export targets with their value addition. As such it can be complemented with Ethiopia developing a technological base and other industrial sector development as it can fetch better foreign currency than exporting it raw.
“The government’s policy is towards development of the industrial sector with great attention and concern for the agricultural sector. So when our development reaches that level, the preference and the advantage is to process and add value and finally export creating job in the process,” Berhane told Capital.
Anteneh Assefa Chief Executive Officer (CEO) of the Ethiopian Commodity Exchange (ECX), said he attended the event to interact with exporters, who are working with the ECX and as such to convey the government’s message of Ethiopia’s position with regard to the existing exchange situation as well as what is thought about commodity exchange in the future. “As you know the session is not only for sesame, because we are doing purely sesame with regard to oil seeds, but we expect other commodities also to be included in the future. We came here to show how the ECX works for sesame, pea beans and coffee,” Anteneh told Capital.
He also said the ECX is currently dealing with only three mandated commodities, due to its limited capacity in terms of warehousing, but in the future it’s thinking of expanding its warehouse capacity, which is expected to lead to the inclusion of other commodities, like other types of pulses, spices, and grains in the near future, to be decided by policy organizations.
“Price fluctuation, transportation cost, difficulty to open L/Cs” a big concern Kidu Woldeselassie, General Manager of Tigray Multipurpose Marketing Federation Limited Cooperative, one of the nation’s leading cooperatives across Tigray regional state exporting various types of pulses and oil seeds to the global market says the market is not yet saturated but transportation costs and difficulty of opening Letters of Credit (L/C) is putting a damper on the competitive market.
The cooperatives export sesame and other pulses, natural gum, and peanuts to markets in China, the Middle East and Europe.
“We’ve been able to see through the conference that our sesame which are of the Humera type, Gonder type, and Wollega type have a lot of demand because of their oil content, color and better taste,” said Kidu.
Kidu also said in Ethiopia sesame is a cash crop and is being produced as an export item at the expense of local use, even though it can be used for cooking oil, which Ethiopia urgently needs. However since production of the cooking oil is expensive, sesame is only competitive when it’s exported.
“Sesame trading competition is very high, with the price of sesame in Ethiopia at this moment being very high, in line with international prices, but in contrast, local prices are decreasing so this is a concern” Kidu told Capital.
He nevertheless said the government is helping in many aspects, such as strong supervision, provisioning loans, implementing better policies in terms of export regimen, although he said the government has been late in trying to resolve the difficulty in accessing foreign currencies.
A representative from Qindao Unisource International Trading Company, a Chinese company importing oil seeds and pulses especially sesame, however struck a more optimistic note saying that the use of various types of Ethiopian sesame is increasing, such as for oil processing, partly because Indian sesame production has decreased relative to last season, and as such the massive Chinese market is expected to purchase high quantities of sesame seed from countries like Ethiopia and Sudan.