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Export Development Fund (EDF), a financing institution for export business, expects the country to export 120 000 tonnes of kilombero rice in 2018 through the pre-season contracts that have offered to farmers after securing markets for the crop.
This development comes at a time rice growers are producing below the required demand, a situation they attribute to lack of viable markets for the commodity.
In an e-mailed response on Tuesday, EDF business development manager Stanley Saka said the target is to get as many commercial farmers as possible to benefit from the huge market for kilombero rice in Africa and beyond.He said EDF and its partners will explain the export market arrangements.
EDF recently signed a memorandum of understanding (MoU) with Mtalimanja Holdings and AHL Commodities Exchange (AHCX) to provide financing to farmers to grow rice.
“So far, the response from farmers is good and we have no worries over productivity as we have put in place production boosting mechanisms to ensure that all the commercial farmers produce rice twice a year while working with our partners.
“Kilombero rice farmers should look after the rice well as there is a ready market and we expect Malawi, through this programme to export 120 000 tonnes next year,” he said.
Already, Tobacco Association of Malawi (TAMA), the largest tobacco association with 120 000 members, which is diversifying to other value chains has hailed the move, but cautioned farmers to understand the contracts, especially when it comes to the price before signing.
But Saka has ensured farmers that all the contracts include prices and all willing farmers know the price before signing the contracts.
According to African Institute of Corporate Citizenship (AICC), in the previous growing season, Malawi failed to meet the global rice demand despite having potential markets in Africa, Asia and Europe.
In an earlier interview, managing director of Mtalimanja Holdings Limited (MHL) David Kamchacha said Malawi has the potential to earn about K293 billion from rice as the crop is on high demand on the global market.
Export Development Fund Ltd (EDF) and Mtalimanja Holdings Limited have today signed a Memorandum of Understanding to engage in various interventions in commercial production of rice for the export markets. This agreement was reached following the realization that rice growers in the country are not fully empowered and integrated in global value chains resulting in them not benefiting from the value chain. The agreement is aimed at addressing several issues in the rice value chain, like quality and productivity, and is targeting the lakeshore rice growing region from Nkhatabay to Dedza. The immediate benefit to farmers in these areas is that they shall have a ready market for their paddy.