By Muluken Yewondwossen
The Ministry of Trade and Industry (MoTI) has blasted exporters of oil seeds and pulses for under invoicing their products. As the
exporters begged for another chance during a meeting held on Friday, MoTI warned they would begin taking legal action.
At the meeting chaired by MisganuArega (Amb), State Minister of MoTI, the ministry told exporters to stop their illegal actions or face
“We have frequently insisted you stop the mal-operation but you haven’t so, now we have decided to take action against you,” Misganu told
exporters, according to sources who attended the meeting.
Sources told Capital the ministry was disappointed by those who are exporting oil seeds and pulses particularly sesame seeds and white pea
beans under the rate they buy at the Ethiopian Commodity Exchange (ECX).
MoTI claims that exporters are engaged in under invoicing the stated export items and that in the past few weeks the ministry met with
relevant exporters and gave them a final written warning.
Sources say Misganu told participants that the ministry had been too lenient on them. He underlined that under invoicing is illegal that the
government will take corrective measures.
“We want the export sector to be profitable and imports to run themselves but you have conspired together and killed the export sector,”
Misganu told exporters.
He said that he called to inform them that legal action would be taken. At that point most of the participants promised to change for the better.
He told them that the ministry official data from ECX, the National Bank of Ethiopia and Customs Commission indicates who is involved in
under invoicing and who is operating legally.
Sources said that about 95 exporters are suspected of under invoicing and buying white pea beans from the open market (primary market).
This is against the law because they are supposed to be transacted through ECX only.
Exporters, mainly new comers are exporting items mainly agricultural products to then profit from their other export items. Experts claimed that
new comers in the export business mainly are trying to secure hard currency, which is very hard to find, and will take a loss to pump their
traditional import activity. “Even though this calculation was profitable in the previous period in the past two years profits from imports have not
been seen. This has damaged the private sector itself and the country,” an expert said.
He added that if the sector runs smoothly it would make everyone happy but the current activity completely spoils the system.
Initially those exporting the seeds and beans have escalated the price at the ECX market to get the product to the neglected traditional
exporters, according to experts.
Experts said that the farm gate price of sesame seeds is up to 2,000 birr per ton but it is being sold at 4,700 birr at ECX. “It is confusing. Suppliers are
gaining more than the farmers,” they explained. “It has to be stopped at some point and harmonize the sector,” they argued.
At the recent meeting MoTI officials clearly indicated that the export price of sesame seeds are lower than the value that exporters purchased
from ECX and some of the exporters have suspended their export. This is happening at a time when other exporting countries like Sudan and
Nigeria are expanding their exports and boosting their production. MoTI officials angrily say Ethiopia is losing its major sesame seed market
in China, which consumes 70 percent of Ethiopia’s crop.
The sector experts said that even though it is the peak season for sesame seed production like other export items traded at ECX the price has
sharply increased every day. Recently a pulse and oilseed trading consultant, who requested anonymity told Capital that even though the
price has gone up at ECX some of those exporters are exporting the seeds at a lower price than the rate that they paid at ECX. “This has
confused the market,” he added.
“For instance, even though the exporter paid USD 1,750 per ton of sesame seeds during trading at ECX it will be sold for USD 1,500. This
trend has affected the export oriented businesses,” he explained.
Sesame seeds are the second largest export earner after coffee, while white pea beans are also the other major export product in Ethiopia,
which is still highly dependent on agricultural commodity exports. (Capital Ethiopia)