Wheat supply shortage challenge flour factories 

-Trading wheat has become a crime

By Kaleyesus Bekele

Disgruntled flour and pasta manufacturers disclosed that they have faced critical shortage of wheat supply as the Ethiopian government started exporting wheat. 

With a big media fanfare two weeks ago the Ethiopian government announced that it has started exporting wheat. Ethiopian Prime Minister Abiy Ahmed heralded that Ethiopia has commenced exporting wheat. The PM and other senior government officials were seen on the national TV proudly looking at bulk wheat product in Bale zone of the OromiyaRegional State, a region known for massive wheat farms. 

Last year the Ethiopian government announced that it would start exporting wheat. Little did the farmers of Arsi and Bale zones know the misery waiting for them in the wake of the announcement of wheat export.

Wheat farmers in the Arsi and bale zones both known for their fertile land and high wheat production had hoped that they would get premium price for their wheat product. To their dismay the Oromiya Regional State forced the farmers to sell their what only to Unions and Cooperatives at lower price. “We are forced to sell 32 birr per KG while a KG of wheat is sold for more than 50 birr in Addis Ababa,” a disgruntled farmer from Arsi Zone told Origins Business. The farmer who wished to remain anonymous for fear of retaliation by local authorities said that farmer who has more than ten quintals of wheat in his house would be arrested. “We were told not to sell our wheat to traders. The price of fertilizer and pestside has increased significantly. We used to pay 10 birr per quintal for the harvester some years ago but now we pay 220 birr per quintal. But the government is forced us to sell a quintal of wheat for 3,200 birr,” laments the farmer.   The famers claim that some of the local authorities buy the wheat at a lower price from the farmers and sell it for higher prices in Addis Ababa. “They buy 3,200 birr per quintal and from us they sell it for 5000 birr in the open market in Addis Ababa,” they said.  

A grain trader in Adama town told Origins Business that they were told not to buy wheat from farmers. “We are arbitrarily detained and interrogated if we are found transporting wheat from Arsi and Bale zones,” the trader said. Consequently, flour, biscuits and pasta factories in the capital Addis Ababa and Oromiya Regional State have faced critical shortage of wheat. Flour factory owners told Origins Business that security forces search and arrest them for buying wheat from grain traders. “The local authorities now consider wheat as contraband good. They even confiscate when they seized wheat at check points, warehouse or even in a factory saying it was purchased illegally,” they said. 

The factory owners disclosed that some of the flour factories were forced to halt production due to the dearth of wheat supply.“This is artificial shortage. We do not understand why the government started exporting wheat before satisfying the local demand,” they added. 

Muluneh Lemma, president of the Ethiopian Flour Manufacturers Association, confirmed that a number of flour factories have suspended production due the dearth of wheat supply. “We are confused by what the government officials are doing,” Muluneh told Origins Business. “We have lodged our complaint to the Ministry of Trade and Regional Integration. We have also held discussions with the Oromiya Regional State Trade Bureau. We were told that they were working on market linkage. They told us to wait,” Muluneh said.

Repeated attempts to get comment from the Ministry of Trade were unsuccessful.  

The prices of wheat flour and wheat products have soared in the local market. A kilo of wheat floor which was 50 birr two month ago has surged to 76 birr. A kilo of macaroni has jumped from 40 to 80 birr in just few weeks’ time.

Residents of Addis Ababa who are hard hit by spiral inflation now wonder why the Ethiopian government rushed to start exporting wheat before satisfying the local demand. The public outcry doesn’t seem to deter the government officials from boasting that Ethiopia would be the bread basket of Africa.