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Ethiopia is, for the first time in 10 years,
suspending the export of sugar to the European Union
to lessen the pressure on the domestic market, Belay
Dechassa, manager of the Ethiopian Sugar Development
Agency told Fortune.
This is despite the fact that the price of sugar in
the international market has been increasing. The
Ethiopian Sugar Development Agency has also been
instructed by the Ministry of Trade and Industry to
import 60,000tn of sugar a week ago, according to a
source who preferred to remain anonymous. The bid
document for the procurement is under preparation,
the source said.
Ethiopia had been benefiting from the Everything But
Arms (EBA) initiative of the EU to export raw sugar
to the EU since 2001. During this time, the country
exported 18,000tn a year on average for which it had
been collecting 492.9 euros per tonne.
In October 2009, the EU liberalised this market,
allowing least-developed countries to export sugar
both duty-free and quota free, which has made the
market price competitive among the exporting
countries, hence less attractive.
"The price we get from our exports is close to the
price we pay for our imports; besides, we have been
unable to meet local demand," said Belay, explaining
why no sugar will be exported. "Of course, if we had
the capacity and had been able to export, we would
have earned some hard currency."
The price of sugar at the world market has been
increasing reaching the current level of around 650
dollars per tonne from 380 dollars per tonne a few
months ago. Habtamu Regassa, commercial department
head of the agency, says the reason for the
increasing price is the increasing demand of the
Indian market and the stagnant supply from the
Brazilian market.
The agency's tender, which will be issued under the
new higher price, could affect the local starting
price for the sugar auction. A year ago, the
starting price was 500 Br; this has since increased
to 1,100 Br. The agency says it did this because it
is basing the starting price on the sugar that is
imported.
The three state-owned sugar factories, Wonji,
Metehara and Fincha, have a total production of 2.7
million quintals, while the demand is for 4.4
million quintals. |
