Ethiopia, Kenya to explore grain trade opportunities

Kenya and Ethiopia set to explore bilateral grain trade opportunities and investments to bridge cross border trade gap and enhance food security.

A Kenyan delegation will convene in Addis Ababa, Ethiopia on 22nd to 25th October 2019 on a grain trade mission to explore business opportunities for grain trade and processing between Ethiopia and Kenya.

Organized by the Eastern Africa Grain Council (EAGC), the delegation will comprise of grain traders and processors, government officials and logistics companies to facilitate access to key economic and grain trade policies for optimal transport routes and indicative costs solutions respectively.

The mission will include a business-to-business meeting in Addis Ababa, an experiential field visit to a grain handling and processing facility in Adama, and a visit to a Commercial Farm in Bahir Dar.

Confirming the delegation’s intent to leverage on the existing trade opportunities in Ethiopia , the EAGC Executive Director said that : “Kenya has recently had an increasing demand for grain raw materials for industrial processing particularly soya beans used for processing of soya milk, soya meat and the by products used for animal feeds manufacturing.”

Additionally, Kenya has seen several new investments in food and feed grain processing and with an additional demand for grain raw materials which cannot be fulfilled by the domestic production. “The Ethiopian grain market therefore offers a very viable source that can be competitive if well facilitated.” Added Mr.Masila.

Ethiopia’s agriculture is largely dominated by the cereal production with major cereals such as wheat, maize, sorghum and barley occupying 80% of agricultural land in the country. Ethiopia currently stands as the largest maize producer in Eastern Africa.

Kenya has been importing grain commodities such as maize, beans, soybeans, common beans, millet and sorghum whose demand is expected to increase in the 2019-20 marketing year as national production of the commodities is projected to fall.

Efforts to increase intra-regional trade between Ethiopia and East African Community countries has seen grain trade between Ethiopia and Kenya grow steadily.

However, Kenyan legal issuance of Certificates of Conformity per vehicle truck as opposed to per consignment for all imports increased the cost of importation of grains such as maize, beans and soybeans from Ethiopia and had knock-on effects on the operations of several grain processors reliant of these imports.

The underlying trade potential between Kenya and Ethiopia is indispensable, having witnessed historic levels of grain trade between Ethiopia and Kenya through the facilitation of over 150,000MT of grain in 2017 by EAGC.”EAGC efforts to address the conformity assessment challenge paid off with a new requirement of only one certificate of conformity per batch or per consignment, which drastically reduced the cost of doing cross border trade,” Said Mr Masila.

Following the recent transformation of the Moyale border into a One-Stop Border Post to facilitate cross-border trade between Ethiopia and Kenya,the modern facility is expected to enable a seamless clearance of goods and people across the border.

The highway corridor connecting Kenya and Ethiopia will not only ease cross-border traffic, but also foster economic integration within the East Africa Community and beyond taking advantage of the Mombasa-Nairobi-Addis Ababa road that will enhance bilateral trade relations between the two neighbors in addition to reducing transport and shipping costs of goods between the two countries.

Trade between Ethiopia and the East Africa Community is increasingly presenting an opportunity for the country to develop standards in harmony with EAC’s partner states to enhance free movement of goods in the region to promote intra EAC trade.

The trade mission is expected to harness the trade potential between the two countries and increase long-term trade and investment while fostering bilateral trade relations. This will consequently bridge the trade balance gap between the two countries to enhance cross border trade and bridge the food security gap in Kenya.