Jordan’s tougher grain purchasing rules disrupt regular supplies
AMMAN - Jordan’s tougher grain tender terms have led to the country struggling to import wheat, potentially putting centralised stocks under strain as international suppliers shy away from higher risks and costs.
The changes, introduced early this year and designed to raise food quality standards, have in recent months become a focal point for a tussle between several government agencies and international suppliers.
International suppliers complain of tougher inspections before cargoes are discharged from the port of Aqaba and tender terms that include higher penalties for contract violations that raise both costs and risks.
“Nobody is going to bid as long as the tender terms remain so exorbitant and the inspections so arbitrary. No miller anywhere in the world treats their suppliers like they do,” said one European trader.
Although Jordan has bought some wheat in recent months to meet its 85,000 tonnes of monthly consumption, purchases were not taking place with the usual frequency, local traders said.
Jordan has had to cancel at least eight tenders due to a lack of offers and the country was forced to buy wheat from the only bidder who made an offer in one tender, a move that has rarely happened before.
Last week it cancelled for the second time a tender to buy 100,000 tonnes of wheat after a lack of bids that some officials privately say was an attempt to put pressure on the authorities to back away from the tighter tender terms.
Still, Jordan remains well stocked so far with seven 50,000-tonne wheat cargoes expected to arrive by the end of January. Another 250,000 tonnes of wheat are already in state silos while one vessel is discharging.
The Middle Eastern buyer has bought 650,000 tonnes of wheat so far this year.
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But the disruption to the tender process is raising concerns that if the lack of offers persists, it could result in a serious drawdown in strategic stockpiles, local traders said.
Officials are already warning they could resort to direct purchases and circumvent the tender system altogether if suppliers continue to show reluctance.
“If suppliers do not submit offers, we have ways and means to act and they would be the losers. We are transparent but I have means as a government to buy directly,” said Yousef al-Shamali, undersecretary of the Ministry of Trade and Industry, which is the sole buyer of the country’s grain imports.
Much of the traders’ outcry followed the rejection by the authorities of a 50,000-tonne shipment of Polish wheat in February on the grounds it had a red colouring that officials said violated Jordanian specifications barring any additives.
Regulators and officials say they were only enforcing World Trade Organisation (WTO) standards and deny any fundamental changes in existing practices whether in terms of tendering rules or specifications.
“It’s definitely not due to the toughening of specifications because these are internationally applied. We are talking about the safety of our goods,” said Mohammed al-Khrisha, a senior official in Jordan’s Food and Drug Administration (JFDA).
Trade officials also say they have worked this month with other government agencies to address most traders’ complaints through new rules that oblige a six day-deadline on the delivery of laboratory test results to allow cargoes to be discharged and also recourse to independent laboratories in the event of cargoes not meeting specifications.
A major cause of anger by suppliers has been scrapping an earlier system that allowed vessels to discharge cargoes on arrival before passing laboratory testing.
But officials say allowing the discharge of grains to government silos on arrival at port was too risky as they had to ensure the best food quality standards.
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