In April 2008, Ethiopia’s first commodity exchange was established in a country where only a third of the agricultural produce reached the market.
The Ethiopia Commodity Exchange (ECX) was created to provide security and visibility for the country’s commodity traders.
Jointly owned by its members and the Ethiopian government, ECX now provides a secure, low-cost platform for farmers to trade agricultural goods (such as coffee, sesame, haricot beans, maize) in an otherwise tradition-bound system suffering from unusually high transaction risks and costs.
The exchange guarantees the integrity of the products traded, quickly and reliably disseminating market price movements to all traders.
In addition to creating a physical and electronic trading platform and market information system, ECX performs warehouse management and quality certification. It also guarantees payment against delivery, solving any commercial disputes through a fair and professional arbitration system.
The exchange has handled transactions worth USD 240 million since December 2008, amounting to over 160,000 tons of coffee beans. An estimated 850,000 small-holding farmers (mostly producers of coffee, sesame and other cash crops) – around 12 per cent of the national total – are now involved in the ECX system.
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