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Meles was very skeptical of this proposition at the
time; high transport cost on bulk cargo would not
make such imports affordable, he had argued, citing
the experience his administration has in the imports
of cement. In order to make imported cement
competitive with the locally produced, the federal
government has lifted off duty and excise taxes.
"The imported one cannot be sold at the same price
as the locally produced cement because of the
additional cost of transport," Meles told Parliament
in March 2008. "To import food is not affordable and
sustainable."
This was in sharp contrast to what he disclosed
during a parliamentary question and answer session
held on Wednesday, May 22, 2008; Meles told MPs that
his administration has signed a contractual
agreement for the purchase of 1.5 million quintals
of wheat from overseas, which he said will be
arriving in 45 days.
The Prime Minister justified this seemingly
turnaround position stating that the price of wheat
in the international market has gone down.
Bulcha feels vindicated, "He refused to accept what
I had suggested," Bulcha told Fortune. "But, within
60 days, he came back to my idea. This is typical of
the ruling party's leaders."
He is, however, skeptical of the Premier's assertion
that the price of grain in the global market was
declining.
"George W. Bush and his Egyptian counterpart, Hossni
Mubarek, have expressed concern about the global
grain price hikes during their discussion on the
occasion of the World Economic Forum held in Egypt
on May 18, 2008," said Bulcha.
However, the United Nations Food and Agriculture
Organization (FAO) last week forecast the new global
wheat harvest at a record 658 million tonnes, up
from 605 million last year. This is expected to lead
to a four per cent fall on the price of wheat on the
global market.
"Wheat is under a potentially huge wave of fresh
supplies, and it's hard for it to stick its head
above water now," Gavin Maguire, analyst with Iowa
Grain in Chicago, was quoted by the British Guardian
last week.
Wheat futures in Chicago Commodities Exchange fell
to their lowest levels since November: Wheat price
for July 2008 fell 33 cents to close at 7.45 dollars
per bushel after hitting 7.42 dollars.
Authorities from the Ministry of Finance and
Economic Development (MoFED) have written last week
to the National Bank of Ethiopia (NBE) requesting it
to advise the state owned Commercial Bank of
Ethiopia (CBE) open letters of credit worth close to
59 million dollars for the imports of wheat,
disclosed sources in the NBE. Other sources in the
administration told Fortune that the wheat will be
imported from South Arica.
The World Bank, a major contributor to the national
productive safety net programme, has agreed to cover
the cost, making the foreign exchange available for
the imports, sources disclosed.
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