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The first two fertilizer procurement tenders of the
2007/08 budget year opened on September 17 and
October 4, 2007, where no break from the
continuously escalating commodity prices. For the
tender the Ministry of Agriculture and Rural
Development (MoARD) floated for the procurement of
75,000 metric tonnes of DAP fertilizer, the sole
bidder, Agricultural Input Supplies Enterprise (AISE),
which showed its interest to supply 25,000 metric
tonnes, offered price range of 510 and 560 dollars
per tonne.
Compared to the price of DAP just last year, 380
dollars per tonne, this year’s price has skyrocketed
by more than 25pc though AISE had imported the
fertilizer for 503 dollars per tonne at the end of
last year under the instruction of the government.
Sources told Fortune that there is a strong
possibility that the tender result may be cancelled,
as the bid document under evaluation is not
complete.
Like DAP, the price of Urea has also shot up as
demonstrated in the procurement tender opened two
weeks ago, which featured a relatively higher number
of suppliers. The state-owned AISE, Biftu Selale
Cooperatives and Inderta Cooperative Bidders
participated on this tender.
Yara France through AISE and Biftu Selale offered
418.43 dollars and 422.17 dollars per tonne
respectively, while Ameropa and Transamonia offered
466.17 dollars and 455.95 dollars as suppliers to
Biftu. Mid Gulf and Libodan Investment and Trading
Group on the other hand, offered 434 dollars and
421.25 dollars in their order, relatively lower than
the other suppliers of Biftu.
The third bidder, Inderta Cooperative, which came up
with four suppliers, was also not an easy challenge
to Biftu Selale. Its suppliers Libodan Investments,
Mid Gulf, Transamonia and Amropa offered 421.25
dollars, 432 dollars, 448.95 dollars and 434.62
dollars per tonne respectively.
The price of a tonne of Urea, which last year was
350 dollars, on average increased by 100 Br this
year.
“Though we had expected that the price would
stabilise where it was last year, it rather is
rising at a higher rate,” sources at MoARD told
Fortune. “The demand is remarkably increasing.”
The unusual tender announcement was made three
months prior to the normal procurement period as
farmers planting crops earlier in the year have no
stocks of fertilizer because MoARD could not acquire
the necessary volume in the 2006/07 budget year.
The fertilizer needed for this budget year has
declined by 120,000tns compared to the last fiscal
year where the Ministry planned to purchase
650,000tns of fertilizer while it still had a
surplus of 145,000tns from the previous budget year.
However, having floated a tender, it only managed to
acquire 275,000tns from the projected need of
375,000tns leaving no this year.
According to a source at MoARD, the Ministry has
planned to procure 530,000tns of fertilizer for this
budget year; 350,000tns of DAP and the balance Urea.
The tender evaluating committee puts the fund
required at 150-180 million dollars.
The General Manager of one cooperative told
Fortune that a quintal of fertilizer was
distributed to farmers for 400 Br last year, 15 to
20 Br higher from that of the previous year.
“I am wondering whether farmers will buy it or not
this year for 420 Br per quintal,” he told
Fortune.
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