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Field Trip to Ethiopia Commodity Exchange (ECX)
The Ethiopia Commodity Exchange (ECX) was established in 2008 and is based in Addis Ababa, Ethiopia.
Following a visit to the lively ECX trading floor, Mr Ahadu Woubshet of the ECX Management team
invited the participants to a traditional Ethiopian coffee ceremony, which was followed by a
presentation and Q&A session.
The presentation kicked off with the dream vision of the founders of ECX, whose hope was:
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‘to build a world class institution signaling Ethiopia’s entry into a modern global market’;
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and ‘to achieve the “New Ethiopia”, embodying passion, innovation, professionalism, and
excellence’.
The initial idea behind ECX was to set up an
Ethiopian Exchange tailored to the specificities
of the country, instead of just replicating other
international exchanges, e.g. Mumbai
Commodity Exchange. ECX was set up as a
Private-Public Partnership (PPP) non-profit
entity, with a joint board of directors
consisting of the different market actors,
members of the exchange and the Ethiopian
government. Today, ECX has more than 400
members and approximately 8000 clients, this
includes about 12% of the farmer cooperative
unions representing around 2.5 million
smallholder farmers.
ECX trading floor
Trading volume in 2010-11 totaled 504,000 tons for coffee, sesame seed, pea bean and maize, with a
trading value of US$ 1.2 billion. On the ground, ECX has a network of over 50 warehouses spread across
17 sites, with a total storage capacity of 300,000 tons. Crops delivered to the warehouses are graded,
handled, entered into the electronic
warehouse receipts system and delivered after
transaction.
What is unique about ECX, is that it is the only
commodity exchange in Africa which has
established a swift payment system, which
settles any trade at T+1 (by 11 am next day).
The complex IT system of the exchange
transmits prices every two second to rural
ticker boards around the country. The ECX
website is the second most visited website of
Electronic price ticker board at ECX
an African exchange after SAFEX. ECX gets more than 60,000 incoming calls per day and has about
160,000 SMS subscribers who receive frequent price updates.
Future challenges include the establishment of an ECX training institute, outsourcing and increasing total
warehouse capacity, and the biggest challenge of all - futures trading.