Identifier
Created
Classification
Origin
08ASMARA356
2008-07-16 08:03:00
CONFIDENTIAL
Embassy Asmara
Cable title:
CARGIL'S BUSINESS ACTIVITIES IN ERITREA
how-toVZCZCXRO8007 RR RUEHROV DE RUEHAE #0356 1980803 ZNY CCCCC ZZH R 160803Z JUL 08 FM AMEMBASSY ASMARA TO RUEHC/SECSTATE WASHDC 9787 INFO RUCNIAD/IGAD COLLECTIVE RHEHNSC/NSC WASHDC RUEKJCS/SECDEF WASHDC RUMICEA/JICCENT MACDILL AFB FL RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ RUEKDIA/DIA WASHDC RHMFISS/CDR USCENTCOM MACDILL AFB FL RUEAIIA/CIA WASHDC
C O N F I D E N T I A L ASMARA 000356
SIPDIS
DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 07/14/2018
TAGS: ECON EAGR ER
SUBJECT: CARGIL'S BUSINESS ACTIVITIES IN ERITREA
Classified By: Ambassador Ronald K. McMullen for Reason 1.4 (d)
C O N F I D E N T I A L ASMARA 000356
SIPDIS
DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 07/14/2018
TAGS: ECON EAGR ER
SUBJECT: CARGIL'S BUSINESS ACTIVITIES IN ERITREA
Classified By: Ambassador Ronald K. McMullen for Reason 1.4 (d)
1. (SBU) Cargil's business activities are thriving in
Eritrea, according to Redaegzy Gebremedhin (protect),the
company's Eritrean representative. Cargil has operated in
Eritrea since 1998, and sold 250,000 tons of grain, sugar,
and other agricultural commodities to Eritrea in 2007. It is
likely that Cargil's provision of 250,000 tons of commodities
makes it the largest foreign commercial supplier of
foodstuffs in Eritrea. Redaegzy expects high commodity
prices to reduce the amount purchased in 2008 to around
180,000 tons. He added Cargil views Eritrea as a top-notch
borrower and extended an unsecured $40 million line of credit
to the Eritrean government to purchase its products, noting
that Eritrea is the only African country for which Cargil has
done this.
2. (SBU) Redaegzy said the Government of the State of
Eritrea (GSE) declined Cargil's 2003 request to invest $25
million in a grain processing facility in the port of
Massawa. While the reasons for declining are mostly unknown,
Redaegzy speculated the GSE feared losing its complete
control over economic activity. He added that if Cargil
renewed its request, the GSE would likely be more favorable.
SUGAR SMUGGLING TO SUDAN
--------------
3. (C) Redaegzy corroborated previous reports that Eritrea
is a major source for sugar smuggled into Sudan. Although he
did not specify the amounts, Redaegzy told Emboff Eritrea
imports large quantities of sugar from Cargil, with certain
Eritrean "business men," (generals and high ruling-party
officials) smuggling most of it to Kassala, just across the
Sudanese border.
4. (C) Other Embassy sources traveling near the Sudanese
border report a circular flow of Sudanese sugar to Eritrea,
and then back to Sudan. Apparently, some quantity of
domestically produced sugar in Sudan is sold at below market
price, while foreign imports, needed to meet all of Sudan's
domestic demand, sell at the much higher market rate. This
leads Sudanese merchants to export subsidized local sugar to
Eritrea (near Tessenai),where it is then re-bagged and
re-exported to Sudan as foreign sugar to be sold at the
higher price. The source of much of this circular sugar
trade is reportedly Sudanese sugar mill workers who are
partially compensated in sugar.
MCMULLEN
SIPDIS
DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 07/14/2018
TAGS: ECON EAGR ER
SUBJECT: CARGIL'S BUSINESS ACTIVITIES IN ERITREA
Classified By: Ambassador Ronald K. McMullen for Reason 1.4 (d)
1. (SBU) Cargil's business activities are thriving in
Eritrea, according to Redaegzy Gebremedhin (protect),the
company's Eritrean representative. Cargil has operated in
Eritrea since 1998, and sold 250,000 tons of grain, sugar,
and other agricultural commodities to Eritrea in 2007. It is
likely that Cargil's provision of 250,000 tons of commodities
makes it the largest foreign commercial supplier of
foodstuffs in Eritrea. Redaegzy expects high commodity
prices to reduce the amount purchased in 2008 to around
180,000 tons. He added Cargil views Eritrea as a top-notch
borrower and extended an unsecured $40 million line of credit
to the Eritrean government to purchase its products, noting
that Eritrea is the only African country for which Cargil has
done this.
2. (SBU) Redaegzy said the Government of the State of
Eritrea (GSE) declined Cargil's 2003 request to invest $25
million in a grain processing facility in the port of
Massawa. While the reasons for declining are mostly unknown,
Redaegzy speculated the GSE feared losing its complete
control over economic activity. He added that if Cargil
renewed its request, the GSE would likely be more favorable.
SUGAR SMUGGLING TO SUDAN
--------------
3. (C) Redaegzy corroborated previous reports that Eritrea
is a major source for sugar smuggled into Sudan. Although he
did not specify the amounts, Redaegzy told Emboff Eritrea
imports large quantities of sugar from Cargil, with certain
Eritrean "business men," (generals and high ruling-party
officials) smuggling most of it to Kassala, just across the
Sudanese border.
4. (C) Other Embassy sources traveling near the Sudanese
border report a circular flow of Sudanese sugar to Eritrea,
and then back to Sudan. Apparently, some quantity of
domestically produced sugar in Sudan is sold at below market
price, while foreign imports, needed to meet all of Sudan's
domestic demand, sell at the much higher market rate. This
leads Sudanese merchants to export subsidized local sugar to
Eritrea (near Tessenai),where it is then re-bagged and
re-exported to Sudan as foreign sugar to be sold at the
higher price. The source of much of this circular sugar
trade is reportedly Sudanese sugar mill workers who are
partially compensated in sugar.
MCMULLEN