Ethiopian wheat imports will remain high next season, as production struggles to recover from the worst drought in decades, US officials said.

Rains failed in Ethiopia last summer, hitting production in Africa’s second most populous country.

The US Department of Agriculture’s Addis Ababa bureau saw bureau forecast that it would likely take “another year or two” for wheat production to recover fully.

And with production suppressed, the bureau expected a continuation of the strong demand that has seen Ethiopia launch a string of massive wheat tenders, with imports remaining at twice their pre-drought levels next season.

Weak recovery

The bureau saw Ethiopian wheat production in 2016-17 crop year, starting in September, at 3.8m tonnes.

Compared to the official USDA figures, this would actually represent a 100,000-tonne drop from 2015-16, when production was hit by an extreme drought, associated with the El Nino effect.

The Addis Ababa bureau dropped its forecast for 2015-16 production to 3.3m tonnes.

“National wheat yields during this period are estimated to have dropped 12% to 2.1 tonnes per hectare,” the bureau said.

Imports remain high

And though wheat imports are expected to pull back a little in 2016-17, the bureau still has them at 1.8m tonnes, twice pre-drought levels.

The bureau is “conservatively” forecasting wheat imports to more than double in 2015-16, hitting at least 2.5m tonnes.

“This figure, however, could climb to as much as 3.0m tonnes to adequately respond to the anticipated humanitarian needs,” the bureau said.

Heavy purchases

“Imports of US wheat, all of which are going for food aid, are forecast at about 700,000 tonnes during this period,” the bureau said.

This week the Ethiopian government issued an international tender to buy around 499,000 tonnes of milling wheat.

This is the latest in a string of big tenders, including 1.0m tonne tender in October last year.

Ethiopia last month tendered for 70,000 tonnes of wheat in February.

Since the start of the marketing year, about 1.5m tonnes of Ethiopia-destined wheat has been unloaded or is awaiting discharge at the Port of Djibouti, the entry point for the country’s wheat supplies.

Demand increases

Ethiopian wheat consumption was seen rising by about 500,000 tonnes, to 5.8m tonnes in 2015-16, “due to the influx of imported wheat in response to the drought,” the bureau said.

Consumers are favoring food made from wheat, rather than the traditional grain teff, which is becoming more expensive.

Prices for teff rose 19% in 2015, compared to an increase of 8% for wheat, despite the fact that the drought is expected to cut teff production only marginally.

Consumption will ease by 100,000 tonnes in 2016-17 the report said, as production of other crops increases.

But although the Ethiopian government plans to increase production in the long term, the bureau noted that envisioned expansions in wheat production are not expected to keep pace with rising consumer demand,” suggesting continued strong imports.

Source: Agrimoney.com
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