Ethiopia’s grain market in danger?

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A yellow wheat rust epidemic, a form of wheat fungus, is devouring crops in three major wheat-growing regional states of Ethiopia. Nonetheless, a grain shortage on the Ethiopian market, which has led to a government decision to import grains, has been blamed on market speculation.

Oromiya, the key wheat-growing region of the country, has been infected by a yellow wheat rust epidemic, according to an assessment by the United States Agency for International Development (USAID) released January 12, 2011. Amhara, and Southern Nations, Nationalities, and Peoples (SNNP) regions, have also fallen victim to the yellow wheat rust, a type of fungus that destroys crops.

Experts say the yellow wheat rust fungus infects crops at all stages of growth. The disease, which is known to spread rapidly, hits crops during the growth season and is symptomatic of stunted and weakened plants with shriveled grains, fewer spikes, and a loss in the number of grains per spike as well as grain weight.

According to the report, quoting an assessment made by the local office of the UN Food and Agriculture Organization (FAO), the epidemic had infected more than one million acres of cropland as of November 2010.

However, notwithstanding the considerable impact that the epidemic, coupled with other factors, might have on the level of crop production, harvest during the main season was expected to be between “normal and above-normal.”

Inflated wheat prices

But, despite USAID’s harvest prediction, Ethiopia has been facing inflated wheat prices on its local market since the beginning of the country’s main harvesting season in October 2010. As a result, the government has intervened by setting fixed prices for basic commodities, including bread.

Meanwhile, the government-run Grain Trade Enterprise (GTE) has commenced distributing wheat at a minimum price to counter inflated market prices. GTE is also set to import 1.5 million quintals of wheat, with the aim of stabilizing the market.

Whilst many believe that the yellow wheat rust epidemic has impacted grain harvest and prices, observers have indicated that grain shortages due to the yellow rust have contributed to government’s decision to import wheat, an assertion that has been rejected by the government.

GTE manager, Berhane Hailu, argues that this harvest season’s grain production has been good. The problem, according to Hailu, is that the main grain market actors inflated wheat prices without adhering to market principles.

And market speculation explains the government’s intention to import wheat.

Berhane says that the government will start wheat importation from January until October 2011, when the next harvesting season begins.

But after a year of unprecedentedly severe droughts and wildfires in Canada and Russia, and floods in South Asia, triggered a rise of over 50 per cent of wheat prices in June 2010, the commodity has more than doubled in price.

Meanwhile, the International Center for Agricultural Research for the Dry Areas (ICARDA) has warned that an even bigger threat of the spread of stem rust Ug99 from Kenya, Ethiopia, Yemen, Sudan and Iran should not be ruled out after the the wind-borne spores were first identified in Uganda in 1999.

Morocco, Iran, Iraq, Lebanon, Uzbekistan, Azerbaijan and Tajikistan also suffered severe yellow rust epidemics in 2010, with Syria suffering the most as a result of the middle-eastern country’s drought conditions masking the rust.

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