Recent reports of Rift Valley Fever in Kenya have cast a shadow over the whole East African livestock trade. In the weeks after the news spread, traders say Yemeni and other Middle East middlemen refused to take Ethiopian animals, even though the disease has so far not appeared in the Horn of Africa nation. Other dealers agreed to take the animals, but at much lower prices.
The disruption came on top of a long running Saudi Arabian ban on the import of Ethiopian animals, again based on fears over livestock health. Ethiopian bulls, sheep and goats still regularly get through to Saudi Arabia, but via Yemeni traders who again use the ban as an excuse for keeping purchase prices down.
The risks do not stop there. There are the droughts and floods that hit the region on an increasingly regular basis, destroying livestock and pasture in their wake. Roaming sheep and goats can fall prey to hyenas and other predators. And there is always the possibility of getting caught up in inter-clan clashes, banditry and the growing conflict between Ethiopian government troops and the separatist forces of the Ogaden National Liberation Front (ONLF).
Prices can also fluctuate widely from market to market and week to week, according to the demand from the Middle East and local trading conditions, threatening thin profit margins. "We hope to make between US$15 and US$20 a bull. Sometimes you have to take a loss," said Arab Muhomed Guled, another Hartishekh trader with 10 years experience under his belt. The price of cows in Jijiga market ranged from 1,470 Birr all the way up to 2,500 Birr in January 2007, according to figures gathered by the government's Livestock Crop and Natural Resource Development Bureau in the town.
The reason that traders persevere in the face of so many risks is simple. The risks may be high, but the scale of the potential trade is higher still.
The sheer size of the region's livestock trade is often masked by inaccurate Ethiopian government figures that only count the legally-registered movement of animals beyond the country's borders. According to official statistics, Ethiopia as a whole only exported 41,565 animals from 2003/4. But according to a soon-to-be-published report from UN OCHA-PCI, more than 400,000 animals were exported, mostly "informally", through just two Somali region markets in 2005.
UN OCHA-PCI researchers estimate that as many as 100,000 bulls may be leaving Ethiopia's Somali region every year, bringing in, on average, 3,750 birr (US$420) a head. Taking the same journey with them are up to 3 million sheep and goats, each worth around 360 Birr (US$40) to Yemeni traders.
UN OCHA-PCI's Abdi Umar does the sums. "That's about US$162m in revenue split between the 5 million people we estimate benefit from Somali Region’s livestock production. The traders are only taking a small margin but the pastoralists can make a lot on each animal.
Somali region traders also do all they can to minimise the daily risks they face. Large herds are split into smaller units as they move across borders to limit their exposure to customs officials and other natural disasters. Animals are handed over to well-trusted agents, bound to the seller by long years of friendship or clan allegiance.
Traders are also starting to minimise the risk of customs seizure by going legal, taking advantage of the first letters of credit schemes set up with local banks just three years ago. "Now I don't have to stay awake at night wondering if my animals are getting through," said exporter Mahamoud Gass Qalinle. Wherever possible, traders make use of the latest communications technology – either mobile phones or high-frequency radio sets known as fonios – to get a jump on changes on market conditions.
"I can stand in the middle of Jijiga market with my mobile phone and find out when there is a boat waiting in Berbera," said Basha Hassan Hussein another legally-registered exporter. "I can find out whether the demand is highest for cows or bulls or shoats (sheep and goats)."
Meskel Square
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