Ethiopian Sugar Corporation (ESC) says it has switched gears to handle the biding process to conclude swiftly rather than the usual trend. The new decision of India is stated as a threat for price hike, while on Friday, Ministry of Finance (MoF) gave its positive response for the process to procure the 200,000 metric tons of sugar.
The corporation said that on the latest bidding process of the sweet it has given a final proposal in few days.
Weyo Roba, CEO of ESC, said that on the latest process to buy the commodity the corporation has taken swift approaches to finalize the bidding process.
“We have learnt a lesson from the experience in the past that takes several periods to finalize the biding process after the opening date,” he said by reminding that it is one of the bottlenecks when concluding the purchase.
It is almost a year since the country imported sugar, while in the current budget year which will come to a close in the coming five weeks; the corporation has floated different auctions and even attempted to buy the sweet through short listed companies despite it not bearing fruit.
On the latest bid that proceeded by inviting shortlisted companies and opened on Thursday May 19, the corporation concluded its evaluation within few days and tabled its proposal for the final decision to the Ministry of Finance on Wednesday May 25 afternoon.
“The previous process took several days for technical evaluation and similarly for financial assessment of the bidder but now that shall be concluded within a day or even hours. But on the latest move we have open the technical on Thursday and the financial proposal on the next day, which is the result of the lesson we got from the past experience. We will follow a similar pace for the upcoming procurements at the corporation,” he told Capital.
Slower processes have been stated by experts to make the country not realize better opportunities to buy the product at lesser prices.
“I have observed that long evaluation processes and further demand to get a green light from the upper government bodies like MoF and even Macroeconomic Committee has forced the bid process to take longer periods and sometimes validation dates for price quotations face expiration,” experts said.
Weyo said that some government procurement processes are lengthy, “for instance for technical or financial evaluations it places days as a mandatory, while the technical is to be done within hours or a day,” he said.
For the latest procurement process, MoF has seen ESC’s proposal on Friday May 27 and has issued a support letter for the corporation to go ahead as per the process.
On the bid, the price quoted shall be valid for eight working days that means it will come to a close by tomorrow May 30.
The financial offer of Osirius Group, which is new for the sector, ED and F MAN, Agrocorp International and Sucden has been opened since they enabled to pass the technical process.
Osirius, which is a US company, disclosed to load the cargo from Brazil, offered CFR Djibouti USD 580, USD 608 and USD 900per ton for LC at sight, and the 12 month and 18 month differed LC payment respectively per ton with USD 3,000 of port visit.
The Singaporean company, Agrocorp offered CFR Djibouti USD 738.35 and USD 799.87 per ton for LC at sight and LC for 12 months respectively for Indian sugar.
ED and F MAN of the UK, which is also known in the Ethiopian market following its good track record like Agrocorp and Sucden, gave its offer for the three payment options as per the bid documents.
The company that mentioned India, Thailand or UAE as commodity origin offered USD 809 for at sight and 12 months payment modality and USD 899 for 18 months LC payment for CFR Djibouti.
Sucden which expressed its interest to supply 100,000 metric tons of the sweet also offered its rate on the three payment options. On its CFR Djibouti offer the French company has given USD 721.63, USD 1, 111.63 and 1, 511.63 for LC at sight, and the 12 month and 18 month differed LC payment respectively per ton.
Weyo appreciated the latest bidding process by describing that on the current process that held on the process of invitation the price is lesser than “that we have seen on the formal bidding process.”
Experts said that the offer of the new company, Osirius, is attractive and estimated that there is a possibility to get the latest award. But they recommended the government to be cautious since the company does not have known reputation in Ethiopia.
“If the country losses this bid process the consequence would be dire since the global market scenario has become volatile,” they said.
They reminded the latest move of India, the second biggest sugar exporting country behind Brazil, imposed restriction on the export of the commodity.
Experts said that the Indian decision will definitely affect the global price in the coming months.