The Ministry of Trade and Regional Integration (MoTRI) lifts the price cap which was re-imposed early this month for the trading of sesame seeds at the Ethiopian Commodities Exchange (ECX). The ministry disclosed that it will follow a flexible approach to manage the market.
The information that Capital obtained from sources indicates that the ministry has lifted the ceiling price for the oil seeds, which is one of the major hard currency sources from the agricultural export.
Slightly over a year ago, MoTRI which is responsible for the follow up of the export sector introduced price caps on the aim to tackle unfair competition on access to commodities at the trading platform of ECX.
Following the introduction of the caps, the ministry in consideration of the international market has been providing weekly upper caps on the prices for major export commodities such as oil seeds and pulses trading.
It can be recalled that MoTRI lifted ceiling prices for the commodities trading at ECX prior to this harvest season which mainly starts mid-October. At the time, it was stated that it lifted the cap due to the decline in hoarding. However, at the time experts had raised concerns that the decision would have an effect on the export business.
A few weeks ago, Kassahun Gofe, State Minister of MoTRI, told Capital that the ministry reinstated the price cap on sesame seeds due to price hikes occurring in the local trading against the global market.
He added that the main objective of the cap is to harmonize the price.
However as per the information Capital obtained this week, MoTRI has lifted the cap after a few weeks of re-introduction.
On Friday November 25, Kassahun told Capital that the ministry is following a flexible approach led by the market.
“We have lifted the ceiling and will take the market approach as per the evaluation of the parameters that we applied,” he elaborated, adding, “Our principle is similar and remains integral to ensure the smooth operations of the sector.”
He illustrated that when the cap was re-imposed about a few weeks ago, the price spiked to 12,000 birr per quintal for the Wolega type of the commodity and even higher price points for Humera.
“As per Thursday’s trading, the price of the commodity is between 9,000 to 10,000 birr per quintal,” he cited.
“If the price shall show increment extraordinarily we will impose the price cap,” he explained showing follow up cautionary measures.
“We have different modalities including contract and investment farming. In the investment farming, huge amounts of sesame seeds have been harvested, thus we are confident that the sector will operate smoothly,” he confidently stated, highlighting how the market will not be abused.
He said that the commodity is flowing in the market with export similarly running within the acceptable manner.
MoTRI is following the trading of 16 oilseeds and pulses that trade at ECX.
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