The Ethiopian Sugar Corporation’s (ESC) international tender to procure 200 thousand metric tons of sugar has faced extensions owing to the failure of offering an indicative rate by the Ethiopian Shipping and Logistics Services Enterprise (ESLSE).
The state owned corporation had issued an international competitive tender on January 4 to purchase 200,000 metric tons of plantation white cane sugar, to which the deadline date for the bid was slated for Thursday February 10. However, the timeline is set to face delays owing to the state owned logistics enterprise’s failure to provide its offer to transport the cargo to the country.
As a result the bid opening date has been postponed to February 16.
Weyo Roba, CEO of ESC, whilst addressing the issue explained that the logistics giant was unable to offer its rate due to price issues which have shown high volatility at the global stage of late. He further stated that the corporation has requested a formal response from ESLSE to table its reasons for not offering an indicative price during the timeline.
“At this point I can not give any specific reason for the case since the enterprise’s response is crucial,” Weyo said, adding, “if they could not offer their rate prior to the up coming bid opening, we may put the case to the higher body to get amicable solutions.”
He told Capital that as a public enterprise the shipment is supposed to be handled by ESLSE, “due to that we have to wait for the solution.”
Regarding shipment price volatility that has been observed in the global market, Weyo reminded that in the previous similar bid which was conducted in the past budget year, ESLSE had offered its rate and within that space the international logistics price shot by 300 percent prior to transporting the cargo.
“Such kind of concern is the reason for ESLSE’s reservation. It is not a big issue and I hope we will solve the problem mutually,” the CEO explained.
Wondwossen Kassa (Chief), Deputy CEO for Shipping Sector at ESLSE, on his part said that the enterprise hesitated to offer its rate for different reasons, “initially the offer was expected to be given for ESC rather than biding companies.”
“If we give the rate for companies they would do their calculation and manipulation and submit their CFR and FOB price, which will not make us competitive,” he explained.
“Certain parameters including shipment period, shipment port, and quantity shall be specifically mentioned to offer the required and actual rate,” he added.
He told Capital that companies just asked general rates for different loading ports, “in this case we shall give indicative price that could not be put for completion and would not benefit the logistics enterprise.”
“These are our reasons for hesitating to offer the rate in this latest sugar bid,” he firmly stated.
“This is our stand. But the case shall be resolved as per the government direction,” he explained.
He recommended that the process must be carried out in such a way that bidding companies offer their price on CFR and FOB. Similarly, ESC ought to request ESLSE to offer its rate as per the parameters mentioned above.
He confirmed that the corporation asked for clarification to which ESLSE will provide its response soon.
The country annually imports up to 350,000 metric tons to address the gap. ESC is targeted to produce 413, 000 metric tons in the current budget year.
Weyo said that in the budget year the corporation planned to supply about 720,000 metric tons of sugar for consumption.
The sugar demand has been growing from time to time and it is estimated that the country’s annual sugar demand stands at 1.2 million metric tons. Thus the remaining gap is covered by other importers who have special permit from the government and those who have Franco-Valuta privileges.