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Addressing Food Insecurity through Regional Trade

Published on March 07, 2017

zeros_to_heros_trade_small.jpegThe March 7 Regional Grain Trade Facilitation Forum in Addis Ababa took place as food insecurity alerts for Somalia and South Sudan hit the news headlines. Ethiopia harvested a bumper maize crop this year, in stark contrast to its drought stricken neighbors. The Forum host, Eastern Africa Grain Council (EAGC), presented an overview of typical trade flows in eastern Africa -- from surplus countries to deficit countries -- and then noted the significant drop in production among the East African Community countries this year.

That drop in production, combined with Ethiopia’s surplus, was the impetus for the Hub-supported Forum. The goals: introduce the traders who could help stem food insecurity across the eastern Africa region. Also, identify the non-tariff barriers and trade policies that can thwart regional trade and work toward their removal. 

Ninety regional traders, processors, bankers, government officials, and providers of transport and logistics attended the Forum. They introduced themselves by country, grain interest and specialty. Bankers summarized their portfolios and encouraged traders to come to them with their contracts. Buyers emphasized the exact grain they were looking for and stressed their readiness for purchase.

“I am a trader and farmer from Kenya’s largest grain producing region, and we currently don’t have any cereals; I’m buying,” said John Kandila, Chief Executive Officer of Zero to Heros (picture above with Ethiopian sellers).

Mr. Kandila later manned one of forty designated tables for buyers to entertain trade deals with rotating sellers. Conversion rates and price per kilo punctuated conversation. The smartphone calculator was omnipresent. Logistical and finance representatives also manned tables, eager to help actualize contracts and problem solve any hurdles that could prevent the movement of grain.

Ethiopia is one of the top ten producers of pulses in the world but only 28 percent reach the regional market. The Hub and EAGC are changing that by facilitating business linkages and adding transparency to the regional trading process. By the end of the forum, traders signed numerous letters of intent for the export of grains (maize and pulses) from Ethiopia to East Africa. These letters are the first step toward building a sustainable trade relationship between Ethiopia and the rest of eastern Africa.