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Seyoum Wolde runs a staff cafeteria on the premises
of Alpha University College, around Beklo Bet. In
the past six months, he has been collecting fresh
injera, a local bread prepared from Ethiopia’s
native staple crop, teff, from Kidane Meheret
Enjera Suppliers Cooperative after entering into a
contractual agreement with the cooperative to pay
1.4 Br for each injera.
Seyoum was not too disappointed close to a month ago
when his suppliers slapped 0.3 Br on the price of
each injera, which he collects from
them twice daily. He is now, however, quite
disconcerted with the latest price his suppliers
have tagged on each injera. From May 24, 2008
onwards, Kidane Meheret has, once again, hiked the
price of Ethiopia’s most popular food to two Birr.
For the 37- year old businessman, his business is
now on a rocky path, as the profitability of a so
far rewarding venture can no longer be guaranteed.
“We have terminated our contract with Kidane Meheret,”
Seyoum told Fortune.
He is now looking for a supplier that can provide
the cafeteria with the grey, spongy-like, flat bread
at a cheaper price.
The sudden price jump of this basic food came after
a shocking increase in the price of teff. For
the first time ever, the populace of the nation has
begun trading teff for close to 1,000 Br per
quintal. In a country where both the rich and poor
depend on injera for their daily consumption,
this is considered more than abnormal.
Two weeks ago - when this economic phenomenon all
began - the price of teff was pegged 940 Br
at Ehel Berenda, a grain-trading centre in Merkato,
the largest open-air market in Africa.
Seyoum’s dilemma with the astronomical prices is not
an isolated case. Businessmen at Ehel Berenda are
also baffled by the unprecedented rise in prices.
All agree on one thing; there has been a significant
decrease in the supply of teff.
“One month ago, a single ISUZU used to unload 300 to
400qts per trip at the trading centre,” says Bekalu
Kebede, a grain wholesaler in Merkato. “No, this
supply has dropped more than four-fold.”
Indeed, farmers and wholesalers in teff
producing parts of the country agree that the supply
to the market has been reduced. One of these areas,
primarily known for the production of the crop is
the Ada’a Woreda, located in Bishoftu (Debrezeit)
town of the Oromia Regional State, 47Km east of
Addis Abeba. Ada’a harbours around 23,900 households
that depend on farming for a living. The woreda
supplies an estimated two million quintals of
teff to the local market every year. Grain
trading is conducted in three marketing centres
three times a week. On Monday, farmers sell their
grains In Dere and Godno markets,
while they take their sacks of produce to Hidi
Market every Wednesday. On Saturday, grains are
marketed in Bishoftu town.
Gudina Cereals Plc, a local company that trades in
grains, complains that the supply of teff
from the farmers is declining daily.
“An individual farmer brings one or two quintals of
teff to the market after gauging the demand
pattern there,” Zewdu Bejiga, shareholder of Gudina,
told Fortune. “And we pay 800 Br to 820 Br
per quintal straight away, hoping to profit a little
over 10 Br from sales.”
Farmers in this woreda plant teff from July
to August and reap the crop beginning from November
to late December. They do not however, provide their
harvest to the market all in one go.
Nigussu Tesfaye is a farmer who farms a 50sqm plot
of land in Ada’a. His views do not differ from the
arguments put forward by the traders.
“I do not rush to take all my produce to market
right after harvest,” says the 35- year old.
He rather prefers to sell his harvest when he feels
that there is sufficient demand in the market to
result in good prices. For him, this is the best way
of securing what he calls a ‘real price’ for the
harvest that he toils to produce every year.
The push-up prices trend is not restricted to local
markets in Addis Abeba, consumers in other regional
towns have also fallen prey to this marketing
strategy.
One such town where the impact of these spiraling
prices is glaringly visible is Adama (Nazareth),
98Km east of Addis Abeba in the Oromia Regional
State.
It was close to one month ago that prices passed the
900 Br-mark in this fledgling town. The best quality
teff has been going for 930 Br, while it is
difficult to secure the lowest quality for less than
850 Br, an amount that just a few weeks ago would
fetch the highest grade of teff. The qualitiy
of the grain, as well as the prices tagged to it,
differ depending on where the harvest comes from.
Teff from Roge Balewold is sold for 930
Br per quintal, and the same amount coming from
Ada’a, Modjo and Muke Turi is tagged 880 Br.
Mekonnen Tibebu, a farmer in Roge Balewold, often
brings a single quintal to the market and bargains
directly with consumers in the grain market in Adama.
“Let the market factors determine the price,” he
told Fortune looking for a better offer for
his single sack of teff.
Such marketing choices by the farmers have
disappointed young traders in the town who have
consequently organized themselves into Micro Grain
Trading Cooperatives in a place commonly called
Dagne Wefcho Bet.
These traders want the farmers to instantly sell
their grain products to them instead of sitting on
their produce in markets in anticipation of better
prices by bargaining directly with the consumers.
It is alleged that farmers, who attempt to strike a
good bargain by dealing with the end user, are often
expelled from the market by law enforcement agents
for abnormally extending their trading period by
anything up to two weeks.
However, experts do not consider the change in
marketing strategy by the farmers as the only
driving force behind the notable price increases.
Kebede Gonfa, deputy head of Ada’a District Rural
Development and Agricultural Extension, says there
are multiple reasons for the rise in prices.
What is pushing up the prices of grains behind the
scene, according to him, is the cost of fertilizer,
which is making farmers unable to use the input.
“Those who use it want their harvests to cover the
cost,” he told Fortune.
On average, fertilizer prices have been rising by
200 dollars on every tender offer this budget year,
reaching 871 dollars per tonne at the last
procurement. Compared to last year, the price has
almost doubled.
Last year, a tonne of fertilizer DAP was sold for
between 366-400 dollars. When distributed to the
farmers, a quintal of fertilizer went for 350-420
Br. This year, however, a quintal of fertilizer is
being distributed to farmers for 600-700 Br.
Kebede also associates the price hike with the
scarcity of Belg rains, which would have
helped farmers cultivate from February to April.
According to him, this shortage has reduced the
production of supplementary food items like maize
and potato.
Belg
rains result in the provision of pulses, cereals,
potatoes and sweet potatoes in South Tigray, North
Shoa, North Wollo, South Wollo, Arsi, Bale, Borena,
North and South Omo, Hadiya, Gedeo among other
regions. They therefore make an important
contribution to the food consumed in various
households.
Experts say the decrease in the production of
supplementary grain types gives rise to subsistence
farming, with farmers producing teff for
their own consumption, resulting in turn, in the
current striking shoot up in the price of the local
crop.
Seyoum is not keen to explore the reasons behind the
increase in the price of teff, but thinks
that it is unfair to pay two Birr per injera.
He says that the quality of the injera he
receives from Kidane Meheret Suppliers has also
declined. The cooperative believes that the injera
they bake is not of the same quality as what they
used to produce.
Almaz Demessie, deputy head of Kidane Meheret, says
the cooperative is now mixing first grade teff
- commonly called Magna - with the second
grade of this grain to bake injera.
“When a quintal of teff is tagged at over 950 Br,
there is no other option,” she bemoans.
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