Prominent suppliers pull out in the latest restricted international competitive bidding for 200, 000 metric tons sugar procurement process which was opened early this week. The number of participants has also reduced compared with the preceding experience.
It can be recalled that the Sugar Industry Group, the former corporation, refloated the international bid on Thursday June 2, to procure 200,000 metric tons of plantation white cane sugar that will be transported from July to September in eight phases.
The restricted international competitive bid was conducted as per direct invitation of companies, who had shown their interest to supply the basic commodity in the past. On the latest bid opened on Monday June 13, four companies including one, which is not new to the Ethiopian market, submitted its technical and financial proposal, whilst one bidder was disqualified right away because of improper bid security.
As per the new introduced initiative, the Group has taken a swifter evaluation for the technical document and was able to open the financial proposal of the three companies on Wednesday June 15.
Following the opening, Osirius Group, which is stated as a US company, disclosed to supply Brazilian sugar, and offered its rate to transport the sweet with three payment alternatives, on letter of credit (LC) at sight, deferred payment 12 months or 24 months after the shipment.
Osirius which recently participated in the annulled similar bid offered an FOB price USD 545 per ton on payment term of LC at sight, USD 627 differed payment of LC 12 months, and USD 763 LC for 24 months.
Its CFR offer was USD 575 per ton for payment at sight, USD 657 and USD 793 for 12 and 24 months LC payment terms respectively.
Mill House International of South Africa meanwhile has offered FOB USD 450, USD 522 and 561 on the payment condition of LC at sight, differed payment of 12 months and 24 months respectively.
Mill House’s, which also participated on the recent bid but rejected at the technical stage, had its CFR offer at USD 480, USD 552, USD 591 per ton on the payment condition of LC at sight, differed payment of 12 months and 24 months respectively.
Both companies, which are new for the same bid in Ethiopia, have offered USD 30 per ton for freight for shipment of own vessel. However, experts on the sector questioned the fright rate.
“It is well known that the freight price has skyrocketed at the global market. There freight request that the commodity will be loaded from Brazil if they shall secure the award is unrealistic in the verge of logistics price hikes,” an expert who followed the case told Capital.
The third qualified company, ED & F Man of the UK has offered USD 715, USD 715, and USD 815 for FOB on the payment condition of LC at sight, differed payment of 12 months and 24 months respectively. Its CFR offer was USD 825, USD 825 and USD 825 for the three payment modalities respectively.
The company which is new to the Ethiopian market has demanded USD 110 per to for freight of owned vessel.
So far Capital has not been informed on the final award, while the price validity will be till the end of the coming week.
The participation of reliable companies has reduced from time to time which experts state as a reason for the frequent bid cancelations which erodes the confidence of big companies.
The country procures about half of its demand, while it has a capacity to produce 365,000 metric tons of sugar per annum.
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