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Ethiopia's maize export surges amid uncertainty

ETHIOPIA - Ethiopia has earned close to half a billion Birr (US$21.5 million) from the export of maize to Kenya, amid a rising concern in drought-affected areas and a series of attacks by the fall armyworm across the nation’s maize fields.

Belayneh Kinde Import & Export Plc (BKIE), who obtained permits from the Ministry of Trade (MoT) four months ago, is the company which exported all of the maize to Kenya.

The high demand of the crop in Kenya was due to a rise in drought in the nation, which left 2.7 million people in need of immediate assistance.

The Company obtained the exported maize from its 2,750ha of commercial farm, located in Southern Nations, Nationalities & Peoples’ Regional State, Ethio Agri-Ceft Plc and other commercial farms in the country.

It also invested over half a billion Birr to harvest the maize.

Kenya was also chosen as an export destination owing to its close proximity to Ethiopia and the better price conditions of maize in the country as compared to other countries, according to Belayneh.

This comes at a time when 7.8 million people are reportedly in need of urgent food assistance in the country and the nation’s food stock reserve is said to be depleted.

Also, it has been widely reported that 135,000ha of maize farms in six regions have been ravaged by the fall armyworm since February 2017.

“It is too early to tell the effect of exporting such quantity of maize. As for now, there is enough maize in the country’s stock,” says Mitiku Kassa, commissioner of the National Disaster Risk Management Commission (NDRMC).

“It is only next month during the release of the humanitarian requirement assessment report that we can assert whether the export had an impact on the stock or not,” Mitiku added.

Despite the government’s claim in having sufficient food stock, the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) and the World Food Programme (WFP) Ethiopia disclosed that the relief food stock available for the country is not enough, reaching 700,000 tons.

The government has also procured 400,000 tons of wheat from abroad this year as opposed to 1.5 million tons brought in last year.

Owing to the recorded depletion in the relief food stock and the rising rate of food insecurity, UNOCHA has also reported that 55 million dollars is needed to respond to the threat in Ethiopia.

Unlike previous years where El Nino and La Nina weather conditions affected the production of crops in the country, production was actually in excess this year, according to Wendimu Filate, director of the public relations & communications directorate at MoT.

Crops like maize and sorghum were especially banned from being exported in previous years where the weather conditions had severely affected their production and were only allowed because of their improved production this year, according to Wondimu.

Accordingly, export of the crops was allowed for agricultural unions and private investors who either own commercial farms or have agreements with farmers for the supply of the crops.

A survey conducted by the Central Statistical Agency (CSA) shows that 71.5 million quintals (7.15 million tonnes) of maize was produced in private peasant holdings during the 2015/2016 Meher season and the number was 72.3 million quintals (7.23 million tonnes) during the previous year.

Officials of the Ministry of Agriculture & Natural Resources (MoANR) affirm that the impacts of the pest infestation will negatively affect the production of maize this year, as it takes time for the affected plants to recover.

Also, the export of maize is disclosed as the country is struggling to cope with a surge in the headline inflation rate over the past two months mainly due to the soaring price of cereals such as maize.

In May, 2017, the headline inflation of the country was at 8.7pc, the highest since January, 2016.

Despite such figures recorded in the country, BKIE exported 570,000 quintals (57,000 tonnes) of maize to Kenya.

Established 11 years ago, BKIE has been mainly engaged in the export of sesame for the past eight years.

Also, the Company is involved in hotel and construction sectors, owning Ethiopia and Adama Ras Hotels in Addis Abeba and Adama, respectively.

July 12, 2017: Addis Fortune: