One company monopolizes maize exports

Grain exporters are unhappy with the government’s decision to only allow a single company to export maize to east and southern African nations. Because of the drought, last fiscal year, exporters were banned from exporting grain. Then, a recent order came from the Prime Minister’s office giving permission to Belayneh Kindie Import and Export plc to export maize to COMESA members. For the past three months the company has been exporting maize while others have been left in the dust.

Ethiopian exporters who were banned from exporting grain are expressing concern to the government because they feel they are being neglected while a single company is solely permitted to export the product.  Sources said that the exporters have taken the issue to the Prime Minister’s Office and the Minister of Trade.

Uganda and Tanzania are major consumers of maize, which is staple diet for south eastern and eastern African countries.

However the drought significantly reduced their production so they began importing it. However, now forecasts indicate that production will improve in Uganda and Tanzania and they could even start exporting the product.

In addition to maize, Ethiopia banned sorghum exports last year and did not lift that until recently According to a source the government realized that there was an overproduction of maize. As a result it allowed one company to export maize from the farm it owns and from other commercial farms.

The Agricultural Transformation Agency said that the country has produced about four million metric tons of maize, with some surplus.

Recently after the Regional Grain Trade Facilitation Forum which was held in Addis Ababa, the  Eastern Africa Grain Council (EAGC ) announced that trade deals in terms of 51 contracts amounting to 275,000 metric tons estimated at USD 55 million were signed at the Ethiopian capital to export grains (maize and pulses) from Ethiopia to eastern and southern Africa.

Since there is a high demand in eastern and southern Africa exporters are looking for permission from the government. This included Belayneh Kindie, who is the leading sesame exporter as well.

Sources claimed the exporters have followed proper procedures.  The government stated that it would allow exports if the maize came from their own farm or they purchased a contract from commercial farms

“We have asked the government to allow us to export the product that we brought from our farms and commercial farms but there has not been progress yet,” exporters claimed.

Due to high maize demand in the region the product has been crossing the southern Ethiopian border via illegal traders.

Belayneh was allowed to export the product about three months ago, and for the past two and half months other exporters asked the government to allow them to export it as well.

At the Forum hosted by EAGC in partnership with the Addis Ababa Chamber of Commerce and Sectoral Associations and held on March 7 Ethiopian exporters raised the issue, but they did not get a response from officials who attended the event at Hilton Addis.

In its statement EAGC said; presently, the eastern and southern Africa region is experiencing a scarcity of rainfall and drought conditions leading to a shortage in availability of food grains, including maize and pulses.

“The situation has concerned the authorities to the extent that some have initiated interventions restricting exports,” the statement reads. It added that some grain traders and processors have also had their operations affected due to the shortage of grains. The statement has also disclosed that in the recent harvest season, Ethiopia experienced a bumper harvest estimated at over 4,000,000 metric tons of maize in addition to beans and other pulses.

“EAGC is gunning her efforts to ensure efficient and sustained trade amongst grain players within eastern and southern Africa. This is through corporate engagement and facilitation of collaborative platforms of both governments and the private sector, which include Business-to-Business (B2B), Government to Government (G2G) and Business to Government (B2G) linkages,” Gerald Masila, EAGC Executive Director, said.

Preliminary estimates from the State Department of Agriculture (SDA) note that imports from Uganda, Tanzania, and Ethiopia will be about 295,000 MT, 360,000 MT, and 1,400 MT, respectively, through June 2017, with imports from Uganda and Tanzania expected to be higher than normal due to anticipated below-average 2016 short rains, and an average 2017 long rainy season harvest in Kenya.

Capital attempted to obtain further information from top officials at the Ministry of Trade, but the Minister and his deputy responsible for the issue are in Seattle to attend the Specialty Coffee Conference and Exhibition.

Weyneshet Endashaw, representative of the Grain Trade Directorate of Ministry of Trade, at first agreed to an interview with Capital about maize exports, but changed her mind when a reporter arrived.

EAGC reports estimates from the Agricultural Transformation Agency of over 1,000,000 metric tons of white maize surplus e available for export, a record bumper maize harvest amid a regional drought that poses a major challenge to the region’s food security outlook. In 2016, an estimated 40 million people in eastern, southern and Central Africa faced hunger due to similar conditions.