The private sector is active at all levels of the national market (village, district, and governorate) for cereal grain and pulses.
Merchants are dependent on a complex, dual marketing system designed to satisfy the needs of local markets (local network system) and those of the urban areas of the country (regional assembly system). Traders under both systems get information on supply and demand conditions through their forward and backward linkages, and they adjust their pricing (linked to unofficial quality standards) and market initiatives suitably.
Both systems operate without the benefit of official standards, weights and measures, or other public regulatory and facilitating functions, such as the dissemination of information on prices, volumes and credit. In such a context, the system is less than fully competitive, and depends heavily on mutual trust built up over the years between farmers and traders.
The handling and storage infrastructure for grains and pulses in the private sector is inadequate and substandard. The commodities are kept in sacks and storage facilities consist of rooms in the farmers' or merchants' homes, in the open air, or in owned or rented all-purpose warehouses. These rooms and warehouses are not rodent- or bird-proof, and the open air storage is subject to the vagaries of the weather. Losses are in range from
4-10%.
A small percentage of the private grain traders uses storage under a bonded warehouse system. This marketing service is offered by some commercial banks to large traders who wish to import grains or need to buy large quantities of local grains, using bank credit.
Traders keep the merchandise in a bonded warehouse, owned or rented by the bank, and retrieve it upon meeting their repayment obligations.
At present, private merchants do not appear to be inclined to invest in storage of cereals.
The traders of the private sector do not have the means to scientifically control stored grain pests (insects, rodents, and birds).
Traders in the cities depend upon PBDAC's services, and pest control private companies in
fumigating their stored grains. Fumigation is conducted under cover sheets using phosphine or methyl bromide according the recommendations issued by the Ministry of Agriculture.
At present, there are no legal restrictions on private sector engagement in importation of grains (wheat, corn, and sorghum) or in the manufacture and distribution of animal feed. But the activity of the private sector is limited due to constraints related to:
· preference given to public sector,
· organisational requirements and logistic of grain importation.