Ethiopia's commodity exchange plans to double the items it trades by next year after introducing an electronic platform to replace its system of shouting and gesturing orders, the firm's chief executive said. Launched in 2008, the exchange (ECX) trades seven commodities, including coffee and sesame, two of the Horn of Africa country's top exports, using an "open outcry" system.
Ethiopia is Africa's biggest coffee producer with output of about 450,000 tonnes for both the 2013/14 and 2014/15 seasons. In an interview with Reuters, ECX's Chief Executive Ermias Eshetu said the launch of the electronic platform in July would allow a trading capacity of 5,000 times more than now. "The whole point of having this capacity is to have the bandwidth to be able to trade multiple commodities with no limits," Ermias said.
"We are going to go after sugar, teff, chickpeas, and whatever the market needs. We will be hoping to double year to year the number of commodities we are trading," he said. The exchange has so far focused on the country's main cash crops. In a bid to boost storage facilities, ECX announced on Thursday that a new government enterprise would handle its warehouse operations, whose dearth was an obstacle to expansion.
The exchange traded 590,000 tonnes of commodities in the 2014/2015 year that ended on June 30, according to company figures. It expects an annual growth of 15 percent each year for the next five years. ECX also plans to introduce futures and forward trading next year, Ermias told Reuters, in a country where farmers are often accused of hoarding supplies in anticipation of price rises.
Ethiopia exported nearly 184,000 tonnes of coffee during the 2014/15 fiscal year, according to trade ministry officials, down from the 190,000 exported the previous period. Ethiopia prides itself on being the birthplace of coffee. The livelihoods of more 15 million people depend on its production, mostly in smallholder farms in the misty forested highlands in the country's west and southwest.
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