ECX on new move to establish ECX Institute

ECX
የኢትዮጵያ ምርት ገበያ
GebeyAchin
Ethiopia
Co m m o d i t y
E xc h a n g e
MO n t h ly Ne w s pa p e r
Volume 1 | Issue 3 | February, 2011
A market to transform Ethiopia
Twenty
thousand call a
day on IVR
The SMS & IVR (Interactive Voice Receiver) services which ECX has launched
recently proved to be effective in disseminating real time market information to users. Figures indicate that the
IVR system is currently receiving 20,00
thousand calls each day, which is expected to increase significantly in days
to come. The new SMS and IVR services
installed at a cost of 1.2 million Br. would
enable any customer to easily access
general market information and details
in their specific personal accounts, even
if they are at a remote location where
telephone network is available.
As the seller is in a position to uncover
information that entails on the status of
its commodity deposited in any of the
ECX warehouse just by making use of
the ECX SMS system, the buyer on the
other side would be entitled to view his
ECX account information at any time
and place.
Likewise, users can obtain invaluable
market information of ECX through the
IVR system making use of their username and password. The ECX IVR lines
have the capacity to serve 400,000 calls
within five minutes.
ECX on new move to
establish ECX Institute
Transaction exceeds 1 billion
The only modern commodity market in the
country, the Ethiopia Commodity Exchange
has implemented a new plan geared towards transforming ECX into a dynamic
knowledge center. The new plan is an outcome of eight month intensive efforts exerted on reviewing the organizational structure and evaluating the performances of
ECX, envisioning the “ECX of tomorrow”.
According Dr. Eleni Gabre-Madhin, CEO of
ECX, one of the core component of the plan
is to establish a modern ECX institute that
serves as center of excellence not only for
Ethiopia also for the whole of Africa.
When the envisaged ECX Institute becomes
fully operational, it is anticipated to provide
demand driven short and medium term
trainings, advisory services and certification.
Apart from providing services, the planed
Institute will have a specialized wing that
undertakes research activities on agriculture and marketing areas.
The establishment of the Institute is believed to enhance the capacity of ECX and
to reposition it as a leading knowledge center.
In a related development, the nation’s only
modern commodity market, ECX is marking
its 1000 day anniversary, where it has officially commenced trading operation.
In the past 1000 days, the Exchange has registered commendable successes that would
be of a source of pride to ECX and the country too.
Statistical data indicate that over the last
1000 days, 221,000 tons of commodity
worth one billion dollar has been traded
through ECX platform, with a zero default.
It was reported that over this time, the number of ECX members and clients has dramatically increased to 450 and 4300 respectively. Likewise, the number of warehouses
has reached to 26 and laboratories to 12 and
electronics price tickers to 31 as well.
ECX upgrades its Electronic Price Display Boards
The Ethiopia Commodity Exchange (ECX)
is setting up a country-wide real-time information display boards to ensure that
updated market information is easily accessible for all market actors. Funded by the
World Bank, the project is aimed at increasing market transparency and an all time efficient trading process.
As Ethiopia is one of the fastest growing
economies in the world and as a large volume of agricultural commodities are transacting through ECX, the new state-of-the
art and real-time display solutions would
ensure transparency, improve information availability and enhance customer
confidence in the market. Also, these price
tickers are serving as a flagship of the Exchange.
The addition of these displays will increase
the total ticker deployment to 180. Of the
154 new tickers, four of them have already
replaced the existing tickers on the trading floor of ECX at its head office in Al Sam
Chelelek Tower. Currently, the building is
also lighting up from exterior with informational electronic boards adding color to the
aesthetic value of the city.
Rural Markets of
Ethiopia Exhibited at
ECX
Ahadu Woubshet, former Chief Market
Data Officer at ECX, said “the new platform
would enable us to respond more quickly to
changes in our business environment, ensure efficient service integration, and build
on a stable market data delivery platform
for future growth”. ‘’These boards come
with advanced functionality’, the Chief Officer added, ‘’ they disseminate ECX’s and
ECX
Women
Football
Team Aims
for Goal
The Women Football Team of the Ethiopia
Commodity Exchange (ECX) is expected to
bravely participate at the national football
competition of the season. The team is composed of players coming from Cheralia, Pepsi
and Ethiopia Coffee women clubs.
international prices within seconds”.
ECX has also a plan to use these boards to
provide additional information for all market actors such as weather reports, news
headlines and other information that might
impact farmers’ lives. The boards are also
equipped with technology that transmits
small video clips; grading standards and oth-
The team is certainly believed to brand
and imprint ECX in the heart and minds of
Ethiopians on every occasion of matches to
take place, putting ECX trademark on their
sportswear before spectators. The Coach of
the team, Ato Tsegaye Wondimu, while announcing the team makers to the staff of ECX
by referring to their name and roles in the
team, he stated that one of the team maker
named Helen Seyifu, is a known star in the
women national team of Ethiopia and two
others also were active in the national team.
According to Tsegaye, Ethiopian women
football clubs are facing difficulties despite
promising performances at various matches,
due to lack of sponsors. He also praised ECX
for contributing to the growth of Ethiopian
women football clubs at this difficult moment and for encouraging womens’ active
Continued on page 8
GEBEYA was a title designated to a photographic
exhibition put on view at the third and second
floor of the ECX quarter on Dec 16, 2010 evening.
More than a few local and international personalities who were coming from embassies, intergovernmental, governmental and nongovernmental
organizations in Addis and other invited guests
were turnout at the exhibition to see the photographic reportage depicting by and large the market life in the rural parts of Ethiopia. The blend of
foreign and local visitors added on the dazzling
scenery and musical instruments slightly coming
through as a background have made the event full
of life and color.
Two wider size screens composing in, several original and colorful photos and around black-andwhite framed pictures were on display speaking
about the sprite and diversity of rural markets in
Ethiopia.
Rural markets in Ethiopia, from Bati Monday to
Sembete Sunday markets, from corn market in
Shashemene and its surrounding to sesame markets in Humera and coffee market in Harara , from
Assayita camel and goat market to late night markets in Surma, Arbaminich and Welayita sodo have
been covered by the photographer Antonio Fiorente.
Antonio Fiorente is a highly acclaimed EthiopianItalian photographer whose works has been featured in numerous local and international publications and exhibitions around the world. Antonio
has been working collaboration with ECX on a major photo reportage project that depicts the lives
and people in rural markets in 26 locations all over
Ethiopia
The photograph exhibition was organized by the
Ethiopia Commodity Exchange (ECX) jointly with
Antonio Florente photography.
Antonio Fiorente photography, which is in Addis Ababa, Ethiopia, best known for its range of
works in commercial and artistic sectors focusing on the people and landscape of rural, tribal
Ethiopia, fiercely revealing the other side of this
culturally enriched nation, whose tarnished image
of drought and poverty dominate worldwide perception
participation in the entire segment.
As this year season of women football match
is approaching, the team has started regular
exercises both psychologically and mentally
so as to become successful.
Recently the team will have friendly matches
as a ground making position to enter into the
upcoming season of competition.
It is to be recalled that ECX also supports
Ethiopian Men Coffee Sports Club as coffee
is one of the commodities which has been
significantly transacted through ECX and as
most ECX members have a strong attachment with the club.
Tsegaye who is assigned to coach the ECX
women football team has an immense career
experience among others, was a player in
the Ethiopian Bank club, as well as Ethiopian
youth and national team at various times.
2
Gebeyachin
Gebeyachin
Volume 1 | Issue 3 | February 2011
ECX Launches Leadership Development Program
Editorial Note
1000 Days,
1Billion Dollar,
0 Default
One Thousand Days
Journey of Excellence
April 19, 2008 marks a unique incident in the history of the Ethiopian market system. It
was a day when the old-age traditional market system transformed into a modern one,
with coming of ECX on track. Moreover, it was an episode where the wide ranging of
market actors such as traders, processers, farmers, and exporters became involved in an
integrated and efficient exchange system that stands for the benefit of everyone and
the nation at large. On this historic day, not only the blurred images of Ethiopia, but also
the larger Africa, stands with proud before the international community. In short, it was
a historic moment where the Ethiopia Commodity Exchange, a real source of pride and
success story for Ethiopia and Africa, came in to existence.
Subsequently, the opening bell that heralded the advent of a new era of modern market, rang at the trading floor of at ECX on April 24, 2008; this time a new chapter has
been opened to the growth of the Ethiopian Agricultural market.
At the outset, many were skeptical about the establishment of an efficient commodity
market in Ethiopia. Pessimism was high. One time, Dr. Eleni Gebre-Madhin, Chief Executive Officer of ECX described the situation saying “Initially, most doubted that ECX
could become a reality, some even going so far as to call it fiction, while even more were
deeply convinced that ECX was a sever threat to their livelihoods”
Contrary to this perception, ECX has practically proven that it is a transparent, efficient
and innovative system that transforms the Ethiopian agriculture to new level; and that
benefits the diverse market actors accordingly.
ECX, which has officially launched its operation with limited human resources and warehouse facilities in April 24, 2008, is now moving on a big scale, performing well, withstanding the ups and down encountered, in the last 1000 days of its journey. Over this
period, ECX has practically demonstrated that it is growing steadily but surely, in am
manner that benefits all and setting a new mode of market to the country.
Thus, over the last 1000 days, it hosted a transaction of 221,000 tons of commodity representing a value of one billion dollar with a zero default. So far
Over this time, the number of ECX members and clients has dramatically increased to
450 and 4300 respectively. Likewise, the number of warehouses has reached to 26 and
laboratories to 12 and electronics price tickers to 31 as well. Besides, a total of 4.5 million
bags have been deposited in the stated period at ECX warehouses and the number of
banks that work in partnership with ECX has reached 7.
Currently 5217 clients are trading in the ECX platform through members and the number of ECX’s permanent employees has reached 595.
Given that information is key to the growth and efficiency of the market, currently, ECX
has been disseminating timely market information on a daily basis to stakeholders
through 3 T.V and 7 radio stations, 14 local news papers, as well as via its website and
electronic price boards it has installed across the country.
Next to South Africa’s SAFEX, the ECX website is one of the most highly visited in Africa.
It is also referred as the fastest information disseminating company for releasing market
updates every two second. Along this, the quality, composition and number of its staff
have shown dramatic changes.
These unprecedented successes that ECX has registered over this short period attracted
attention of several local and international media. In the same way, several international
dignitaries, government officials and prominent personalities and celebrities visited
ECX, the first of its kind Commodity Exchange in Africa.
In a nut shell, In the last 1000 days of journey, ECX has clearly demonstrated that it is well
placed to deliver quality and efficient service, that its operations are transparent and
reliable geared towards ensuring a win-win- situations to all market players.
Armed with new energy and commitment, ECX will aggressively work towards the realization of its vision of “transforming the Ethiopian economy by becoming global commodity market of choice”
ECX
የኢትዮጵያ ምርት ገበያ
GebeyAchin
A market to transform Ethiopia
A Monthly Bilingual Newspaper published by ECX,
External Relations and Communications Unit
Address: P.O.Box 17341, Tel. +251-11-554-7001/553-5860
Alsam Chelelek Tower 1
Ethiopia
Co m m o d i t y
E xc h a n g e
MO n t h ly Ne w s pa p e r
Volume 1 | Issue 3| February 2011
ILI, the leading International leadership Institute
in partnership with the Ethiopia Commodity Exchange (ECX) has kicked off, as of December 11,
2010, a new training program that aims at enhancing the leadership and management skills of
ECX managers.
The training is deemed to allow ECX managers
upgrade themselves with the steadily growing
technological performance and organizational
dynamism at ECX. The training is conducted for
every Saturday over the coming five months and
is open for all interested managers.
Among others, the training takes in courses, of
having direct repercussion on the actual efforts
of the ECX managers, such as Transformational
Leadership, Project Management, Conflict Resolution, Teamwork, Customer Relations, and Time
Management.
About 20 ECX managers have so far been taking
active part in the program. This new initiative will
have continuity in the future and involves other
level of staff, it was learnt.
International Leadership Institute (ILI), which has
been providing the training here, is a known private leadership institute operating in Ethiopia,
partnering with different institutions worldwide.
Apart from offering regular Doctoral, Postgraduate and Undergraduate Degree programs to individuals in Ethiopia and beyond, the institution
provides short-term trainings to meet the immediate capacity building needs of leaders and
organizations.
Leaders are supposed to cope up with the reality
of changes that takes place in, an organization,
society and the world at large.
Members Participate in Training
Ethiopia commodity Exchange (ECX) held refreshment training on January 13, 2011 largely
targeting on sesame and white pea bean members as these traders are new with little knowledge on the working process and procedures of
ECX.
Well over 150 members who are keen to learn
about ECX were in attendance of the session.
Managers who are drawn from Member Relations and client, compliance, central depository
and trading divisions addressed pertinent information to participants on as to how their respective divisional operations are taking place.
Mainly, actions that are not allowed during trading hours have been discussed with the intention
to avoid any future incident of such happenings
which contradict rules of the trading operations.
In addition, details over the Ethiopian commodity Exchange contracts, payment procedures, and
other important rules of the exchange were high
on the agenda of the discussion.
During the meeting, participants also raised
some challenges that they have been facing in
their line of business and other key concerns that
require further explanations.
Some of the participants we talked after the
meeting said, such events are quite important
and must have continuity since they are opportune moments to clarify ambiguities and confusion on the part of new members of sesame and
white pea bean, who recently joined ECX.
It is to be recalled sesame and white pea beans
have been exclusively being traded at ECX since
October 2010.
Market information Vital for Ensuring Transparency
ECX creates trust and transparency among all
market actors through employing aggressive
market data dissemination scheme. This has
been stated at a half day orientation program organized to familiarize journalists on market information reporting and new developments in ECX,
on December 29, 2010 at ECX.
Along with this, it was mentioned that ECX uses
its clearly defined rules of trading, warehousing,
payments, delivery and business conduct, and of
its internal dispute settlement
mechanism to
further ensure
the integrity and
transparency of
the market is well
maintained.
Fikru Woldetensie,
Market
Information Dissemination Manager, said during
the orientation
that it is timely
and vital to update journalists
with new developments in ECX
and make sure their reporting on ECX is accurate,
comprehensive and consistent.
ECX generates market information in the form of
price, trade summaries and commodity contracts.
Apart from this, it also disseminates weighted
average prices of commodities, grades and volumes of commodities traded through various
channels. Only these information of ECX are of-
ten released to media outlets owing to space and
time limitation on the part of ECX media partners. Hence, it is not a perfect indicator but the
only possible way to reach the mass, Fikru added.
Despite this, trade summaries are dispatched in
the form of bulletins on Daily and Monthly bases
involving market analysis, commentary and comparisons of ECX traded commodities prices to
comparable commodities in international reference markets,
it was learnt.
‘By having ECX
market information every
day, farmers
discover prices
for their produce, traders
know the market trend, policy makers get
a clear picture
of the market
and consumers know what
the
market
offers and for
how much,’ in
accordance with a power point presentation by
Fikru.
About 20 journalists drawn from private and
public media attended the training.
ECX makes use of various information dissemination channels including, electronic media,
presses, its official website, rural electronic price
tickers, fax, telephone, email, and SMS/IVR.
First Ever ECX Day to be Celebrated
The first ever day-long ECX Day is going to be celebrated at the town of Hawassa on February 19,
2011 as part of an initiative to raise the awareness
of farmers, clients, members and concerned government officials. The event is particularly aimed
to cementing the existing working ties between
ECX and its diverse Stakeholders spread out all
over the country.
In addition, the events are believed to be instrumental to significantly changing the perceptions
brought into the minds of some local people towards ECX.
The notion of ECX Day has first been emanated
from a conception that ECX should discuss mutual concerns with market actors by going to the
nearby locations of residences instead of calling
them to Addis for every single update.
Next to Hawasa’s event, the ECX day is scheduled
to be organized successively to some six selected
regional towns of Ethiopia. Thus, ECX day will be
marked in Jimma, Gonder, Humera, Nekempte,
Adama, and Harrar towns involving an estimated
500 to 1000 number of participants altogether in
each town .
The ECX day program is basic in terms of addressing the local community about the vision, mission, objectives and daily working procedures
of ECX and in a way, find way out to related concerns that are likely to encounter in the course of
action with ECX.
Gebeyachin
Volume 1 | Issue 3 | February 2011
In Depth Special
3
Highlight on the background of E’hil Berenda
Ayalew Abebe Market Research Specialist
Different grain commodities come
from different parts of the country
and redistributed to other parts of
the country. Normally, regions with
surplus commodity first brought
their produce to the central market
using different channels of distribution and then part of the produce
will be consumed at the central
market while the remaining is redistributed to food deficient regions. In
the process of distribution and redistribution of grain commodities, the
central market (Addis Ababa) plays
great role. There are different grain
markets (places) in and around Addis
Ababa where most region and central buyers meet and exchange what
they have. Among these, Messalemia, Gerji, Kality, Saris and Shola markets can be mentioned. Messalemia
grain market is, however, considered
as the largest grain market place
where wholesalers, institutional buyers, retailers, brokers and consumers
engage to the greater extent while
the other grain market places consist
of mainly retailers, consumers and
smallholder producer-suppliers.
E’hel Bereneda was established in
the regime of Emperor Hailesilassie I,
back in 1966/67 in Merkato. According to primary sources, since Markato
was also serving as the main bus station, it was found difficult to create
smooth transaction flow of grain in
Merkato. Then a decision was made
to take the grain market into Messalemia, where by then it was relatively
out of the city. Messalemia grain market is located in North West of Addis
Ababa, near to the main bus station.
It is under the administration zone
of Addis Ketama Sub City, Kebele 09.
The grain transaction in this market
is taken place both on the open air
as well as at the sub-standard warehouses, which are most commonly
known as Berendas. In fact, this
Berendas are half constructed; with
no complete wall as it can be seen
from the picture below.
Ownership, Blocks and Berendas:
There are about 20 main Berendas
constructed in blocks which are
further partitioned into smaller
Berendas. These Berendas are
constructed before 43 years and
all of these Berendas are owned by
government. Regarding the number
of small Berendas, there is different
view. The survey made by Ministry of
Agriculture (2006/2007) showed that
where grains are coming into the
central market depends on different circumstance such the particular
commodity harvesting season (in
terms of distribution of rain fall) and
the demand for each commodity. We
have learnt that at times the wheat
coming from areas such Hossa’ena
and Butajira (SNNP) will have huge
demand while at other times the
wheat from around Arsi and Bale will
dominate the wheat market. Regardless of such situational variation on
the origin of supply of commodities
traded through Messalemia grain
market, there are areas which dominate supply of a commodity. Gojjam
is mentioned as the major supply of
Teff while Balie dominates the supply of wheat. Wolega is known with
the supply of maize and sorghum.
See the table 1 on the bottom of the
page.
Source: Depart. of Agricultural Inputs
and Marketing, MoARD, February
2007and primary data.
there are about 200 small Berendas
with an area of 18 meter square
each. But, according to revenues
section of Kebele 09, there are about
282 small Berenedas with different
capacity. Among these 282 Berendas,
244 are working on grain trading
while the remaining are trading
different commodities such as spices
(pepper, garlic etc), and Fast Moving
Consumer Goods (FMCG).
Market day and season: the main
market days in the week are Monday,
Wednesday and Friday. The regional
suppliers usually enter into the
market early morning starting from
5:30 A.M. But the market usually
gets lively and full in the hours of
7.00 A.M to 9.00A.M. The market
season of each commodity depends
on usually the harvest season of
the commodities and other market
related factors. But usually supply
of different cereals reaches its boom
in the months of January through
March.
The demand for most
cereals (maize, wheat & sorghum)
gets higher during Kiremt season
which roughly covers June, July and
August. The demand for pluses and
oilseeds is, however, export driven.
This is to mean that as exporters
engage in the market the demand
for such commodities gets better
and vice versa.
Volume of transaction: Regarding
S/N
1
2
3
4
5
6
Commodity
Maize
Wheat
Teff
Sorghum
Chickpeas
Neug
Origin of supply
Wolega
Ballie
Gojjam
Wolega
Ade’a
Wolega
Contribution in %
50
50
40
50
35
50
Table 1: Selected commodities’ origin of supply
volume of transaction, there are different views, too. The survey made by
MoRD (February 2007) revealed that,
in average, 16,000 quintal are traded
per day. But other primary sources
witnessed that the maximum daily
transaction volume will not be more
than 6,000 quintals per day. In fact,
the volume of grain transaction at
Messalemia market show decline
through time due to different reasons:
• Regional wholesalers are linking
up themselves with bulk buyers
using their representatives. The
transaction is carried out of Messalemia since the representatives
are delivering the grain directly
to the institutional buyers;
• Exporters of different pulses and
oilseeds prefer to either directly
contact the producers or the regional wholesalers;
• The Establishment of ECX has
also contributed to some extent
for the week participation of
the previous actors. According
to the discussion, some of the
grain brokers have left out their
job since some assumed that the
Exchange is created to eliminate
the role of brokers;
• Like regional wholesalers, farmers’ cooperatives and unions are
trying to link up themselves with
intuitional buyers.
Major commodities trader in
Messalemia: Several commodities
are traded in this market including
maize, wheat, Teff, Sorghum,
chickpeas, horse bean, lentils,
rapeseed, and linseed. The first four
commodities traded on this market
are Maize, Wheat, Teff, and Sorghum.
The other important crops traded at
larger extent in Messalemia market
include chickpeas, linseed (telba),
Niger seed and Lentils.
According to discussion held with
selected grain traders, the origin
Note that sesame seed is not included since currently the commodity is
traded rarely through this market.
The detail origin of supply of each
commodity is included in appendix I.
Legal status of the market
actors at Messalemia
According to the discussion held
with selected traders, the actual
number of market players in Messalemia grain market (from sellers’
side) is more than 1,000. The survey
made by MoARD also supported that
more than 1000 traders participate
in the sales process at Messalemia
only. However, the data gained from
Kebele 09 show that only 244 traders
took license from the Kebele to trade
grain. Hence, the number of licensed
actors in the sales of grains at Messalemia market is insignificant; which is
less than 25% of the total actors. We
have also learned that there is no one
Continued on page 8
4
Gebeyachin
Volume 1 | Issue 2 | December 2010
Guest of the Month
Staff Profile
Before ECX
came into
existence,
the market
was in a
gloomy
scenario
" He who endures,
conquers."Persius
Ato Solomon Edossa
Chief Information Technology Officer
Solomon Edossa was born in 1964 in Addis Ababa. In 1982, soon after taking high school leaving
exam, Solomon immigrated to America leaving
behind his family and his country of birth. At the
time, the move to America was met with mixed
emotions. Relief - as those were trying times for
many Ethiopian youths; Sadness - for leaving behind his family, friends, and country of birth. However, these emotions were met with an absolute
determination to make something of himself.
The long road travelled
Having no family and limited friends in America,
adjusting to life in the United States wasn’t easy.
Solomon recollects, how basic and simple things
such as finding a place to live, securing an apartment, understanding the transportation system,
obtaining employment, figuring out a way to selfreliance were an uphill battle.
Despite this, Solomon was able to obtain a job as
a Security Guard within his first six months in the
United States. This first year, he worked 16 hours
a day, seven days a week,
traveling great distances
each day just to make it
to work. Solomon recalls,
“I was tired, missed my
family, my friends, and my
country. There were days
I just wanted to flat out
give up, but my faith in
God, and my determination to make something
of myself held me steady.”
Determination and faith
paid off, as that year Solomon was able to become
self-reliant and save
enough money to enroll in the Computer and
Electrical
Engineering
program at the University of the District of Columbia (UDC) where he
ultimately obtained his
first degree. Reflectively,
Solomon reminisces on
the odd jobs he had to hold for five years while
remaining a full time student – security guard, taxi
driver, pizza delivery boy, and a gardener.
A bend in the road, a turning point
Upon obtaining his first degree from UDC, Solomon applied for a series of professional job opportunities within his area of study. Almost immediately, he was presented with two job offers. One of
which was from a company called Electronic Data
Systems (EDS). EDS required Solomon to enroll
and pass a one and half year company sponsored
training and development program in Engineering and System Development, before offering him
a permanent position within the company. Solomon, successfully completed the program, and
thus assumed his first position as an Engineering
Systems Engineer supporting plant floor electrical
systems at the Cadillac car assembly plant in Detroit, Michigan and later in Ohio. During this time,
Solomon decided to pursue his graduate studies
and obtained his masters in Manufacturing Engineering and Management while working at EDS.
While working eight years at EDS, Solomon held
various technical positions and implemented
large scale systems and solutions for EDS corporate and government clients. Among Solomon’s
most complex assignments were: the implementation of a system that automatically recommends
vehicle electrical wiring/components compliant
with electrical and manufacturing specifications
for General Motors; and the development and
roll-out of an out-patient clinical system to all US
military health care facilities world-wide. It was
during this time that Solomon obtained a clear
and solid understanding of how to execute, implement, and deploy large scale system solutions
leveraging full life cycle systems development
methodologies. It was also during this time that
Solomon says he obtained a heightened appreciation for the role IT plays and importance of client relationship management, program manage-
ment, and change management principles crucial
for successful IT implementations.
After working at EDS for eight years, Solomon decided to expand his professional career and joined
Accenture - a management consulting, technology services and outsourcing company dedicated to helping its clients become high performance businesses. While at Accenture, Solomon
is most proud of the build out and rollout of an
online eCommerce site integrated with inventory
management system and a third party real-time
credit card payment transaction processing and
settlement platform for the United States Postal
Service to market all its product offerings to consumers and businesses. He also led the build and
implementation of highly intelligent electronic
document management system converting over
two million pages and a data warehousing project involving multiple data sources and over 100
million records to produce innovative dashboards
and reporting capabilities for strategic and operational users at the
United States Transportation Security Administration (TSA).
A chance meeting
In 2008, Solomon met
Dr. Eleni Gabre-Madhin through a mutual
friend at a restaurant
in Washington, DC. It
was during this meeting that he first heard
about ECX and her efforts over the prior 5
years to set up a Commodity Exchange in
Ethiopia where there
was no organized, efficient, fair and transparent market. Her idea
and vision was bold
and, quite honestly
seemed to him wildly
unrealistic, given Ethiopia is a developing
country likely lacking the infrastructure and the
capacity to successfully implement such an institution. However, the very idea really attracted
him and made him convinced to seriously consider being part of this big dream. Solomon always
had plans to do something meaningful for his native land sometime in the near future but never
did he intend to come this soon. He commented
jokingly, “Man proposes, God disposes.”
A full circle travelled
After living abroad for over 26 years and inspired
by the vision, purpose and goal of the Ethiopia
Commodity Exchange, Solomon has travelled full
circle and is now currently living in his country of
birth with his wife and three children. Solomon
says he feels a very intrinsic sense of pride in being able to leverage his professional experience at
his country of birth.
Solomon feels blessed to have a supportive wife
willing to put off her professional career to be part
of this dream. His kids are now speaking Amharic
fluently and experiencing life in Ethiopia – he
says his 6 year old son’s favorite food used to be
a Big-Mac sandwich from McDonalds, but now it
is Chekena Tibs (Filet Mignon) with Awaze (Ethiopian Paprika Sauce).
He is humbled by the dedication, talent and commitment of the ECX staff who are the greatest assets of this institution. Solomon says, we made
possible what seemed to be impossible. This is
the story of ECX.
What the Future Holds
Solomon says he continues to build capacity and
lay a strong and lasting foundation for ECX to
thrive long after he leaves. When asked about
his professional goals after ECX, Solomon says
he aspires to leverage the enormous experience
gained at ECX and his prior professional life towards a mission that can have a broader and positive impact, preferably within Africa.
Ato Nur Hussein Ahmed
GM of KAS International Trading
His name is Nur Hussein Ahmed. He is the General Manager of KAS International Trading. KAS Trading is a company with 14 years of experience in exporting oilseeds, pulses, grain and spices to international market. It is also one of the founding members of
ECX. Ato Nur Hussein is our invited guest of this edition. We talked to him to share us
his views and experiences in the export sector and at ECX, where he has been actively
participating since April 2008.
Gebeyachin – As you are full member of ECX,
what commodities are you exchanging through
the platform?
Ato Nur Hussein – We are working on all commodities which are being transacted through
the ECX. Initially we were transacting only maize
and pea bean, and then we began to largely
work on Coffee. Currently sesame and white pea
bean are also among the commodities that we
are seriously giving our attention at ECX.
Gebeyachin – How many clients do you have under your business in ECX?
Ato Nur Hussein – Currently there are about 90 clients who have been working with us. Of them,
the majority are typically working on coffee. Indeed, the number of clients who are engaged
on trading sesame and white pea bean are also
constantly increasing.
Gebeyachin – What special benefits do your clients enjoy while working with your company?
Ato Nur Hussein – Of anything else, we grant
them reliability in the business. We advise them
to expand their spectrum in a bid to involve
themselves in the export sector than remain on
supplying commodities. We appreciate not only
individuals but also new cooperative unions to
join the sector which has a paramount significance for the economy of the country.
Gebeyachin – How do you characterize export
trade?
Ato Nur Hussein – Wow…, it is a broader concept.
Anyone is likely to join the business. But it requires having skill and commitment to sustain
and get profit out of it. We have seen many being short-lived and others get confused in the
business. In the export trading, you have only
two foreseeable options, i.e. either to grow succeeding in the business or get out of the game.
Gebeyachin – From your experience, what do
you suggest that an individual or enterprise in
the export sector should do in a bid to succeed
in business?
Ato Nur Hussein – Among others I suggest them
to be alert of the local and international business climate, to access basic market information from various sources which they deemed is
pertinent to their activity, undertake experience
sharing tour, participate in international trade
fairs and give due attention for promotion and
communication works, that‘s all.
Gebeyachin – Can you please tell us KAS’s experiences in this regard?
Ato Nur Hussein – Often times, we lean on the
available information to carry out every activity.
We also participate in national and international
trade fairs. To cite one of our active participation in 2000, we took active part in seven international fairs introducing a kind of green seed
called Masho to the international community.
India was the only country considered for producing Masho seed. Due to a massive promotion we did, however, Ethiopia begins to export
Masho to Europe. Despite our withdrawal from
Masho market, we still know that the Ethiopian Masho seed is highly demanding at the
European market. Today, we have international
customers to whom we are selling various commodities in Middle East, Far East, Europe, and
America.
Gebeyachin – What were the major problems
exporters encountered in the previous system?
Ato Nur Hussein – Before ECX came into existence,
the market was in a gloomy scenario. Many exporters were almost exiting from the business
in fear of loss. We didn’t get market information
on time. Thus, without having knowledge of
the overall market pattern, we were forced to
sign contracts with international buyers. When
discovering the market, however, we didn’t get
things as per the contract we signed with them
which frequently put us into conflict with our
international partners. After ECX came to the
picture, our problem associated with accessing
market information has been fully solved. For
this reason, those who were exiting from the
business are recuperating and others are also
being encouraged.
Gebeyachin – What other challenges that you
faced about products?
Ato Nur Hussein – Export commodities were not
in line with quality standards of the international market, which in effect caused in the minds
of distinguished international buyers bad image
to Ethiopian agriculture. For instance, Ethiopian
coffee which is originated from Yirgachefe and
Ethiopian Sesame coming from Humera are
known for their top quality in the international
marker; if you export these quality commodities mixing with other substandard produce,
it will automatically affect the reliability of the
market and will have a negative repercussion
on the economy of the country in the long term.
Quality commodity is just a basis to the growth
of export trading. On top, I believe we have to
maintain our good images first. Ethiopia used to
export top quality red pea bean to Pakistan. In
one incident I remember, high amount of wet
red pea bean sent to Pakistan; when one of the
containers was opened at the port, it was found
to be the most poor quality produce. Since that
moment, no buyer has been willing to buy red
pea bean from Ethiopia. Ethiopia is exporting a
very minimal amount of commodity to the international market as compared to other countries. Unless we pay the due attention to quality,
we may even loss this status. Indeed, after ECX,
things have been changing; quality has been
taking a new position of priority.
Gebeyachin – there is a rumor as exporters are in
convenient with ECX. How far is this true?
Ato Nur Hussein – As to me, I don’t think there is
any exporter who is discontent with ECX. How
an exporter who used to buy substandard quality commodity from anywhere become inconvenient when begins to buy quality produce
from central market at ECX? For instance, if I
want to buy 50 thousand quintal quality commodity through ECX today, I certainly do it very
easily. However, unless and otherwise you do
this through ECX, you will be faced numerous
mess-ups. In fact there is always one truth that
we shouldn’t deny i.e. resistance is inevitable
whenever new initiatives come. It is for this natural reason that there were some exporters who
were suspicious about ECX especially in the initial period of its operation. I can assure you that
those suspicions are already turned into confidence. Mainly EPOSPEA has a positive attitude
towards ECX for it solves problems regarding to
quality.
Gebeyachin
Volume 1 | Issue 2 | December 2010
5
6
Gebeyachin
Gebeyachin
Volume 1 | Issue 3 | February 2011
Market Analysis
ECX Commodities Market Performance
ECX Unwashed
Export Coffee Session
Performance
ECX Coffee Session
Performance:
All coffee categories (Washed Export, Unwashed Export, Specialty
Export, & Local Use Coffee) had been
transacted at the ECX Exchange floor
during the 21 sessions in the month.
Unwashed export coffee departed
the month controlling floor attention
with 51% of the volume and 63% of
the value followed by Local use coffee, Washed Export, and Specialty
Export in row.
Compared to month of October
coffee volume traded made a 19%
growth substantially from the new
season regular Washed Export and
Specialty Washed. Average price for
the month made an advance ranging from 18% for Washed Export to
2% for Specialty and Unwashed that
is highly attributed but not limited
to local & international factors endowing suppliers strong bargaining
power. Shortage of quality Arabica
beans & speculators rush to pile up
stock due to poor supply projection
from Central and Latin America associated with bad weather and fungus
affecting coffee beans had been major price fuelling phenomenon upon
which suppliers base their quote
and buyers accept for. USD’s level of
strength against other major economy currencies was another common denominator affecting price in
all commodity markets around the
globe. The devaluation effect and
market information empowered
growers charging higher price were
some of the major local factors affecting daily closing price at the ECX
Exchange floor.
ECX Washed Export
Coffee Session
Performance
Washed pounded the floor with its
new season offer; 4,527.63 tons had
been offered on its 14 appearances
during the 21 session in the month
that was cleared for 172.9 million
ETB. With its 20% volume contribution for 13% of the total value
Washed finished third in terms of
market share.
Washed Sidama shined forwarding
45% of the total volume of the category for 66% of the value followed by
Yirgacheffe that departed the month
head to head with Sidama at 45%
of the volume and 21% of the value
market share. Lekempti finished last
with its meager contribution of fraction of a percent.
Compared to month of October
volume traded shot by 94%, significantly from the major players of the
category; Yirgacheffe, Sidama, and
Limmu by 97%, 94%, and 84% respectively.
Average price for Washed had
surged during the month for all origins except for Bebeka. Major increment registered was for Limmu that
made an advance of 34% with the
least for Yirgacheffe that sealed up
by 12% compared to month of October. Compared to same month last
year, price had been in record performance; Limmu went up by 42%
while Yirgacheffe and Sidama made
36% & 38% on top of November
2009 average price.
Table 2 shows volume, value, and
market share performance of
Washed coffee by coffee origin.
In the month of November trade at the ECX
Exchange floor had been conducted for 21 days
during which 22,832.49 tons of coffee, 24,811.1
tons of sesame, 9,166 tons of round & flat white
pea bean, and 30 tons of white maize transacted
for 1.5 billion ETB.
The new season harvest sesame crowned as
volume market share leader contributing 44% of
the total volume traded and coffee on the value
fetching 61% of the total transaction value.
Table 1 below shows volume, value, and market
share performance for coffee, sesame, pea bean,
and white maize.
Table 1. ECX Traded Commodities Volume, Value, & Market Share Performance, November 2010
Market Share
Average price in ETB/Feresulla
Per 100 Kg for PB & Maize
Commodity
Category
Volume in ton
Value in ETB
Coffee
Washed
4,527.63
113,806,798.00
945.85
Unwashed
11,676.72
571,757,066.96
832.42
Specialty
1,761.58
102,223,552.54
986.51
Local
4,866.56
113,489,490.59
396.44
Total
22,832.49
901,276,908.09
715.53
Pea Bean
Sesame
Maize
Volume
Round White PB
7,336.10
56,142,553.55
765.29
Flat White PB
1,829.90
13,415,496.66
733.13
Total
9,166.00
69,558,050.21
758.87
Humera/Gonder
22,271.60
458,345,150.41
2,057.98
Wollega
2,539.50
49,342,016.97
1,942.98
Total
24,811.10
507,687,167.38
2,046.21
White Maize
30.00
76,500.00
56,839.59
1,478,598,625.68
Geand Total
255.00
Value
40%
61%
16%
5%
44%
34%
0.1%
0.01%
100%
100%
Table 2. ECX Washed Export Coffee Performance, November 2010
Market Share in %
Volume
Value
WAP Per
Feresulla
Coffee Origin
Volume in Feresulla
Volume in Ton
Value in ETB
Sidama
120,815.00
2,053.87
113,806,798.00
941.99
45%
66%
Yirgacheffe
37,326.00
2,053.87
36,540,029.48
978.94
45%
21%
Bebeka
847.00
14.39
652,625.00
770.51
0.3%
0.4%
Tepi
5,189.00
88.22
4,598,494.52
886.20
2%
3%
Limmu
18,423.00
313.20
17,130,412.14
929.84
7%
10%
Lekempti
240
4.08
211,200.00
880.00
0.1%
0.1%
Total
182,840.00
4,527.63
172,939,559.14
100%
100%
945.85
Table 3. ECX Unwashed Export Coffee Performance, November 2010
Market Share in % Volume
Value
236,587,807.20
WAP Per
Feresulla
822.46
42%
41%
2,613.09
135,477,456.49
881.38
22%
24%
112,134.00
1,906.28
93,156,586.57
830.76
16%
16%
76,856.00
1,306.55
58,662,384.30
763.28
11%
10%
Kaffa
15,450.00
262.65
12,779,245.50
827.14
2%
2%
Sidama
25,807.00
438.72
21,952,689.90
850.65
4%
4%
Yirgacheffe
15,250.00
259.25
13,140,897.00
861.70
2%
2%
Total
686,865.00
11,676.72
571,757,066.96
832.42
100%
100%
Coffee Origin
Volume in Feresulla
Volume in Ton
Value in ETB
Jimma
287,657.00
4,890.18
Lekempti
153,711.00
Harar
Forest
Table 4. ECX Washed Export Coffee Performance, November 2010
Coffee Origin
Volume in Feresulla
Volume in Ton
Value in ETB
WAP Per
Feresulla
Market Share in %
Volume
Value
Washed Sidama
62,619
1,064.53
61,821,109.53
987.26
60%
60%
Washed Yirgacheffe
15,776
268.20
15,881,905.65
1,006.71
15%
16%
Washed Kochere
6,882
117.00
6,930,275.01
1,007.01
7%
7%
Washed Limmu
14,753
250.80
14,107,968.85
956.28
14%
14%
Washed Wenago
2,541
43.20
2,528,295.00
995.00
2%
2%
Unwashed Harar
1,050
17.85
953,998.50
908.57
1%
1%
103,621
1,761.58
102,223,552.54
986.51
100%
100%
Total
Traded on all the 21 sessions during
the month, 11,676.62 tons of Unwashed coffee had been transacted
for 571.8 million ETB. Unwashed
maintained its lead momentum commanding the volume market share
at 51% for the value at 63%. Of Unwashed origins Jimma shined again
in November with 42% of the volume
and 41% of the value of the category
followed by Lekempti.
Unwashed seems on volume down
ride since it is on verge of leaving its
2009-2010 high time until it comes
back in February 2011 with the new
season produce. Volume dwindled
by 29%; major decline had been from
Yirgacheffe and Jimma.
Except for the pricy Harar, average
price for the rest of the origins escalated ranging from 1% for Jimma to
5% for Yirgacheffe.
Table 3 exhibits Unwashed coffee
volume, value, and market share performance by coffee origin.
ECX Specialty Export
Coffee Session
Performance:
ECX Specialty Export coffee made
1,761.58 tons to the floor from six
origins for 102.2 million ETB. Volume
made 96% increase that is attributed to strong supply from the new
season Washed. Washed Specialty
Sidama departed the month at forefront with 60% of the volume and value market share followed by Washed
Yirgacheffe. The only Unwashed type
representative Harar made 1% of the
volume and value for the category.
Table 4 shows Specialty Export coffee
performance for the month of October.
Price for all washed types made an
advance parallel to the trend in other
categories except Unwashed Harar
that went down by about 6% compared to previous month.
ECX Local Use Coffee
Session Performance:
ECX Local Use Coffee had been
traded for 13 days during the 21
sessions in the month. Local had offered 4,866.56 tons of coffee that was
traded for 113.5 million ETB. Local
Unwashed made 92% of the total
volume market share for 92 % of the
value while Washed Byproduct & Sidama fetched the rest. Unwashed
dominant position is expected to
dilute with increasing volume of
Washed hitting the market.
Unlike the other coffee categories
average price for most of the origins
settled low compared to month of
October. One major reason for the
downward price had been lower
grade coffee volume dominance
in November compared to higher
grade of coffees traded in October.
Table 5 below shows Local Use Coffee performance for the month of
October:
ECX Coffee Price Vs
International:
In the international market ICE Futures price has maintained its inflated
trend since June 2010 closing in the
higher range margin. Among market
Gebeyachin
Volume 1 | Issue 3 | February 2011
ECX and the Market
Visit
A Brief Overview of the Ethiopia Commodity Exchange
EU Delegation Visits ECX
The Ethiopia Commodity Exchange (the “Exchange”) is established by
the Ethiopia Commodity Exchange Proclamation No.550/2007 as one of
the basic ingredients to transform the country’s agriculture to market
oriented production system.
As per its establishing proclamation, the Exchange is created to accomplish the following purposes:
• to create an efficient, transparent, and orderly marketing system
that serves the needs of buyers, sellers, and intermediaries, and that
promotes increased market participation of Ethiopian small scale
producers;
• to provide a centralized trading mechanism in which offers to sell
and bids to buy are coordinated through a physical trading floor
with open outcry bidding or an electronic order matching system
or both;
• to provide automated back office operations to record, monitor,
and publicly disseminate information on Exchange transactions;
• to provide standardized grade-specific contracts as the basis of Exchange trading;
• to conduct trading on the basis of product grade certificates and
guaranteed warehouse receipts;
• to clear and settle all transactions conducted on the Exchange to
minimize default risk;
• to provide a mechanism for dispute resolution through arbitration;
• to provide timely market information to the public;
•
to carry out market surveillance to ensure the integrity of the members and of the market; and
• to avoid contingent risk to the market through implementing risk
management by employing proper management mechanism.
To effectively carry out the above purposes, the Exchange is established
as a demutualized corporate entity with clear separation of ownership,
membership and management. Thus, although the Exchange is wholly
owned by state of Ethiopia, it has an autonomous and professional management that shall be neither related to the ownership of the Exchange
by government nor to the Membership of the Exchange. It is designed
as a public-private partnership enterprise, in a unique institutional innovation for Ethiopia.
The Exchange has members that have been recognized as Exchange Actors by the Ethiopia Commodity Exchange Authority and who have the
right to trade only for their own account or either for their own account
or the account of clients. At a sale of membership seat, any person who
fulfills necessary requirements set under the Rules of the Exchange and
other pertinent laws can acquire membership of the Exchange that shall,
among other things, confer a right to trade at the Exchange.
The Exchange has a Board of Directors, Chief Executive Officer, who shall,
among other things, organize, direct and administer the Exchange, and
the necessary officers and staff.
The composition of Board of Directors, which oversees the management
of the Exchange, is designed to maintain a healthy balance of owner and
member interests. Thus, it is composed of eleven members, of whom six,
including the chairperson, are representatives appointed by the owner
and five are elected by the members of the Exchange.
The Exchange has created a marketplace, where buyers and sellers come
together to trade, assured of quality, delivery and payment, by implementing its establishing proclamation, the rules of the Exchange and
other pertinent laws that governs its day to day operations.
fundamentals’ major price influencing factors that had been trend setters since June had been poor supply
of quality Arabica beans from origin
despite the 2% annual global coffee
consumption growth and speculators competing each other to stockpile out of poor supply projection
from Central and Latin America due
to bad weather and coffee disease.
Of other variables affecting price
along the commodity market spectrum was the level of USD strength
against other major economy currencies that played important role exerting bullish sentiment tilting price to
the right in most of the cases.
Chart 1 below shows ECX Export
Washed & Unwashed Spot price
trend Vs ICE Futures December delivery price.
ECX Sesame Session
Performance
The 2009/10 Sesame production
made to the ECX Exchange floor in
bulk concluding the month with the
lion volume market share at 44% for
34% of the total value market share.
A total of 24,811.1 tons of sesame had
been traded for 507.7 million ETB. Humera crowned indomitable contributing 90% of the volume for 90% of
Twenty five members of the European Union delegation to Ethiopia
paid a visit to the Ethiopia Commodity Exchange (ECX) on Dec 7,
2010.
The delegation led by H.E Ambassador Xavier Marshal, EU Ambassador to Ethiopia, rang the bell and observed the morning trading
session that took place at the ECX octagonal trading floor.
Dr. Eleni Gabre-Madhin, CEO of ECX, briefed the delegation about
the purpose and operations of ECX. Ambassador Marshal was accompanied by ambassadors of EU member countries to Ethiopia,
including Ambassador of Ireland and Romania, Mr. Denis Tiyelin,
head of the Rural Development and Food Security sector, Mr. Ornawd Dimurn and other officials. The delegation also held discussion with ECX management on issues of common concern
Members of the House visits ECX
Members of the Trade Standing Committee of the House of Peoples
Representatives of Ethiopia
Paid a visit to ECX on January 13/2011.
A 13 member team led by Honorable Ato Birk Gizaw, Chairman of
the Trade Standing Committee observed the morning trading session that took place at the ECX trading floor. Ato Birk Gizaw also
rang the bell that heralded the beginning of the session. bell and
Dr. Eleni Gabre-Madhin, CEO of ECX, briefed members of the committee about end-to-end operation of ECX and responded to various questions raised by the visiting team. The delegation also held
discussion with ECX management on issues of common concern
CEO of Bill and Melinda Gates Foundation Pays a
Visit to ECX
Mr. Jeff Raikes, Chief Executive Officer of the Bill and Melinda Gates
Foundation together with his wife paid a visit to ECX on Dec 7, 2010.
Apart from visiting the day’s afternoon session trading, Mr. Raikes
also held discussion on various issues with management team of
ECX.
During the talks, Dr .Eleni Gabre-Madhin presented a paper that
entertains the objective, vision, mission organizational structure, as
well as successes that have so far been achieved and future plan of
the company, to her counterpart. Dr. Eleni also responded to questions that call for further clarification.
Oman Businesspeople Visits ECX
A delegation of 20 businesspeople led by sheikh Hamoud Said
Abdullah Al Rasbi, board director of Oman Chamber of Commerce,
visited ECX’s trading operation on its final day of visit to Ethiopia,
December 3, 2010. The delegation came to Ethiopia with the aim
to explore investment opportunities and devise ways for enhancing
bilateral trade ties existing between the two countries.
It was upon the invitation of the ministry of Foreign Affairs of Ethiopia that the delegation paid a working visit to ECX.
Table 5. ECX Local Use Coffee Performance, October 2010
Coffee Origin
Unwashed Byproduct
Volume in Feresulla
Volume in Ton
Value in ETB
WAP Per
Feresulla
Market Share in %
Volume
Value
137,080.00
2,330.36
69,290,605.64
505.48
48%
61%
Unwashed Forest
43,132.00
733.24
13,352,454.67
309.57
15%
12%
Unwashed Sidama
30,899.00
525.28
7,815,067.32
252.92
11%
7%
Unwashed Harar
1,200.00
20.40
354,000.00
295.00
0%
0%
Unwashed Lekempti
2,700.00
45.90
816,750.00
302.50
1%
1%
49,039.00
833.67
12,791,419.60
260.84
17%
11%
7,294.00
124.00
4,534,596.68
621.69
3%
4%
14,924.00
253.71
4,534,596.68
303.85
5%
4%
286,268.00
4,866.56
113,489,490.59
396.44
100%
100%
Unwashed Jimma
Washed Sidama
Washed Byproduct
Total
Table 6. ECX Sesame Market Performance, November 2010
Volume in in
Volume in
Sesame Category
Value in ETB
Quintal
Ton
WAP Per
Quintal
Market Share in %
Volume
Value
Humera Sesame
222,716.00
22,271.60
458,345,150.41
2,057.98
90%
90%
Wollega Sesame
25,395.00
2,539.50
49,342,016.97
1,942.98
10%
10%
248,111.00
24,811.10
507,687,167.38
100%
100%
Total
Table 7. ECX Pea Bean Session Performance, November 2010
Pea Bean Category
Volume in
Quintal
7
Volume in
Ton
Value in ETB
WAP Per
Quintal
Market Share in %
Volume
Value
Round White Pea Bean
73,361.00
7,336.10
56,142,553.55
765.29
80%
81%
Flat White Pea Bean
18,299.00
1,829.90
13,415,496.66
733.13
20%
19%
Total
91,660.00
9,166.00
69,558,050.21
758.87
100%
100%
the value; Wollega made the rest.
The monthly average price for Humera settled at 2,057.98 ETB/quintal with its export parity equivalence FOB Djibouti at 1,338.70
USD/ton. Wollega run for 1,248
ETB/quintal and its export parity at
1,268.37 USD/ton.
At the trading floor daily closing
price for Humera had been skidding since its start contrary to Wollega that left the month in increasing trend in most of the sessions.
ECX White Pea Bean
Session Performance
Started in October with the white
round type, pea bean appeared in
all the 21 session in November including the white flat type. A total
of 9,166 tons of white round and
flat pea bean had been exchanged
for 69.6 million ETB. Round white
pea bean led the category with
80% of the volume for 81% of the
value.
Price made noticeable advance for
the white round pea bean topping
October month closing by 15%/
8
Gebeyachin
Gebeyachin
Volume 1 | Issue 3 | February 2011
E’hil Berenda...
News in Picture
Continued from page 3
who received license for grain broker-ship. Rather the broker-ship is done by
wholesalers, retailers and illegitimate brokers.
The major problems of grain
traders at Messalemia
Quality problem
Traders in Messalemia reported that there is a quality problem. The quality may
intentionally be negatively affected for the sake of getting better return by adding the quality with less standard crops. The other problem is that smallholder
famers are not well in post harvest management. They usually mix the good
quality with substandard one. Few traders suggested that there is a high price
difference for crops coming from smallholders and commercial farms. For instance, the price of maize of Agri CEFT (a commercial farm) is usually greater
in average by Br 20 per quintal than that of the same maize coming from the
same origin from smallholder farmers. The basic reason for price difference is
that institutional buyers especially processors pay due attention for quality of
the crop. On the other hand, intuitional buyers have reported that there are
some traders in Messalemia which deliberately mix commodities coming from
different origins.
Poor warehouse and high trafficked market place
Needless to say, the warehouses (Berendas), which were established before 43
years ago, are shoddy. The two side of the warehouse are left open. During the
night time the two sides are simply covered with simple canvas and it is up
to the guards to ensure that more than 10,000 quintals commodities are safe
throughout the night. In fact, according to the discussion held with some traders, there is no incidence that such commodities are lost. Even in most cases
the owners don’t check the quantity every morning rather it is highly dictated
by trust.
But the major problem I observed there is that the traffic is highly congested.
Particularly, in early morning, more than 150 trucks are congested around the
warehouse; the donkeys fill any space left open. Then, traders are supposed
to move around in this highly congested area. Frankly speaking, for an outsider,
the traffic and the warehouses are somewhat disgusting. But the traders are
familiar with these odd things and most of them never mentioned it as a problem.
Priority to relatives
Few traders and informal brokers reported that the supply channel is highly
dominated by family members (kinship). If maize is to come from Jima, regional
traders hardly contact maize traders in Addis unless the traders came from the
same area. If the wholesaler in region has no buyers in the Messalemia who
came from the same region, the regional wholesaler opts to have representative in Addis who maybe relative or at least who came from the same origin.
Hence, brokers and wholesalers in Addis struggle to find regional wholesalers directly. For this reason Addis brokers are becoming assistant to regional
wholesalers’ representatives in feeding them important information.
Unfair competition
There is extreme difference in retail cost. Those who rented the retail store from
the government (Berendas) are paying just Br 36 per square meter. However,
the pity traders who rented the retail store from private owners are paying Br.
250 per square meter. This creates a huge gap to contend successfully.
Uncertain future
There is a huge rumor on the future fate of the Messalemia grain market. According to leaders of grain traders association, initially government was interested to change the old market into modern grain market. Following this rumor,
the majority of grain traders in Messalemia came together and formed a share
company called Messalemia Grain Trade S. C and requested government (Addis
Ababa City Administration) to offer the land so that they can construct modern
warehouses. However, there is no positive response from the administration so
far. The share company has done nothing in the last three years; the share holders are getting frustrated about the future fate of the company and the market.
On the other hand, following the rumor on the future fate of Messalemia grain
market, the majority of previous grain brokers had formed a share company
called Jemo General Business S. C. According to a trader who is shareholder of
both Messalemia Grain trade SC and Jemo, Jemo was primarily formed to secure land from Oromia region government to construct a modern grain market
near to Addis Ababa (assuming Messalemia is to be non-functional). However,
constructing a modern warehouse required them to raise a capital of more than
Br.161, 000,000.00. Even though still the issue of constructing the warehouse is
under process, Jemo doesn’t seem in a position to generate the required capital. Unfortunately, the researcher couldn’t capture the position of Government
on the future fate of E’hil Berenda since concerned officials at Addis Ababa City
Administration were out of office for different reasons.
ECX upgrades...
Continued from page 1
ers…which enable them increase their productivity and quality consciousness.
The display boards being installed across major market spots of the country will
have constant link to ECX’s trading headquarters at Addis Ababa through broad
band internet network system.
When all the boards become fully operational, ECX will have the first nationwide infrastructure that is used to release information within seconds throughout the country by leveraging ETC’s broadband technology.
ECX is committed to creating a level playing field for all players and continue to
the ongoing capacity building program. ECX has been using different mechanisms for market information dissemination such as electronic display boards,
its official website, radio, television and the print media.
It was in February that the tender for the project was floated to the international
vendor community however, due to the complexity of technical requirements,
only a handful of bidders passed the strict selection criteria set by the World
Bank. With a decade of experience developing information display solutions for
financial and commodity markets in Africa, Middle East and Asia, Wavetec was
selected as the implementation partner of choice.
Partial View of the Photographic Exhibition held at ECX, evening on
Dec 16, 2010 that depicted the diverse Rural Markets of Ethiopia
ኬ.ኤ.ኤስ ኢንተርናሽናል
ትሬዲንግ ኃ.የተ.የግ.ማ
በምርት ገበያው ውስጥ ከምስረታ ጊዜ አንስቶ እስካሁን
ድረስ የነቃ ተሳትፎ ያለው!!
የቡና፣ የቦሎቄ፣ የሰሊጥና የበቆሎ ግብይቶችን በማካሄድ
ሰፊ ልምድ ያካበተ ድርጅት!!
የሚሰጣቸው አገልግሎቶች፡• ስለምርት ገበያው አሰራር የማማከር አገልግሎት
• የክሊሪንግ አገልግሎት
• መሸጥ
• መግዛት
የሚፈልጉትን ምርት በሚፈልጉት
ጥራት፣ ዋጋና መጠን መግዛት
ወይም መሸጥ ከፈለጉ ከካአስ
ኢንተርናሽናል ጋር ይስሩ!!
ደንበኞቹን በታማኝነትና በቅንነት
ሌት ከቀን የሚያገለግል!!
ለበለጠ መረጃ 0111-555869 0118- 101283 0911- 204568 0911-515622 0913-842824 ፋክስ፡- 0115-56-02-77 ኢ ሜይል፡- [email protected]
ዌብ ሳይት፡- www.kasethio.com
ፋጡማ
ጀማል
ጅምላ ቡና ንግድ እና ሙሉ አገናኝ አባል
የኢትዮጵያ ምርት ገበያ ሙሉ አገናኝ ኤጀንሲ
ለኢትዮጵያ ምርት ገበያ ተገበያይ በኮሚሽን ቡና መግዛትና መሸጥ
በኢትዮጵያ ምርት ገበያ ማንኛውም ግብይቶች ላይ በመሳተፍ መግዛትና መሸጥ
ሀገሪቷ በምታመርታቸው ምርቶች ቡና፣ሰሊጥ፣የቅባት እህሎች ወዘተ ወደውጭ መላክ
ጥራትና ቅልጥፍና መለያችን ነው!!!
ስልክ 0115 150536 ሞባይል 0911 208183/0911 397999 ፋክስ 0115 15
05 63 ኢሜይል [email protected] አድራሻ ልደታ ፍርድ
ቤት ፊትለፊት ኑር ህንፃ 1ኛ ፎቅ 2 ቁጥር
Gebeyachin
Gebeyachin
12Volume 1 | Issue 3 | February 2011
Trade Report of Decemeber, 2010
Commodity
Volume of Trade in Lots
Volume of Trade in Tones
Flat White Pea Bean
563.18
2,815.90
Round White Pea Bean
1,474.82
7,374.08
Grand Total
2,037.99
10,189.97
Maize1
63.00
315.00
Maize2
36.29
181.47
Grand Total
99.29
496.47
Mixed-Humera
3.25
16.23
Mixed-Wollega
8.18
40.89
Whitish-Humera
7,773.30
38,866.51
Whitish-Wollega
2,391.91
11,959.56
Grand Total
10,176.64
50,883.19
Local-Unwashed
1,337.83
3,411.47
Local-Washed
279.33
502.79
Unwashed
4,151.24
10,585.66
Unwashed-Specialty
7.00
17.85
Washed
5,993.21
10,787.78
Washed-Specialty
2,310.11
4,158.21
Grand Total
14,078.72
29,463.75
IT Corner
IT Matters!!
For an exchange that has traded over 1 Billion dollars in a matter of 1,000 days, the existence of high quality, secure and scalable IT
capabilities become paramount and mission
critical. The ECX IT Strategy is envisioned to
address precisely these business needs while
recognizing the strength and limitations of
local environment. Our strategy and IT solutions needed to accommodate wide array of
business operations including warehousing,
clearing and settlement, and central depository which were not typically core functions of
an exchange. While the trend is now changing,
almost all exchanges are built for futures trading as opposed to spot trading which our country needed at the onset. These business needs
made it difficult for ECX to buy such trading
platform from providers of such solutions. Initial attempt to acquire a commodity exchange
trading platform that met part of ECX business
needs came at a price of over 10 million dollars.
Therefore and while not without taking a major risk, the decision to build this unique and
one of a kind spot exchange platform quickly
became clearly obvious. So, the journey to
build the Local Area Network (LAN) and Wide
Area Network (WAN), data center infrastruc-
the needs of the exchange for the next 3 – 5
years.
Exchange members telephone service rollout
– The underlying Private Automated Brach Exchange (PABX) system with voice recording,
and redundant power options is implemented
and in use by ECX staff. The underlying business process and pilot with select ECX members have been completed. The full rollout is
pending availability of reliable telephone lines
planned for mid 2011 and final operational
readiness testing. This service provides protection to both ECX members and their respective
clients by recording all trade instructions.
Support multiple pay-in and pay-out accounts
– The current limitations where there can only
be a single member pay-in, client pay-in, and
client pay-out accounts per ECX member will
soon be a thing of the past. Members and
their clients will soon have the option to have
their own pay-in and pay-out accounts allowing members to maintain their banking relationships while providing clients the added
protection to secure their proceeds from trade
transactions. The implementation of this much
needed service is planned for March, 2011.
Deploy 150 market data display units – The
ture, market data dissemination, spot-based
exchange software to enable inventory management, warehouse receipting, central depository, clearing and settlement, and trading
operations began in early 2008 with a mission
to go live in April, 2008. As planned, these IT
capabilities were built and the exchange began
trading on April 24, 2008. Since then and despite continued electrical and telecom outages,
the exchange never cancelled scheduled trading sessions and managed to settle all trades
on T+1 basis without any default by leveraging
the ECX IT capabilities. This is achieved as a result of the relentless commitment by the local
young IT professionals who built or integrated
the entire IT capabilities of the exchange, local
IT providers who played a key role in building
or supplying IT components, and layers of redundancy built-in to our IT solutions to proactively respond to failures.
The decision to buy vs. build-in-house is never
easy to make and requires careful considerations. Looking back, the decision to build the
ECX trading platform in-house was prudent
and actually enabled us to very quickly adapt
to the dynamic and changing needs of the exchange including launch of coffee and sesame
trade in very short order and at a much lower
cost. This was achieved because the software
and the underlying IT infrastructure was developed and maintained by capable local staff.
The exchange never rests and always looks
ahead to ensure that the needs of the exchange
is proactively met in all business areas. As such,
the IT Division is focused on key strategic initiatives to support the expanding business of the
exchange.
Technology refresh and upgrade – The existing data center and network infrastructure has
served us well thus far. However, the growth
and expansion in transaction volume, commodities, footprint, and market data dissemination points require more robust and scalable IT infrastructure. Providing online trading
platform will also significantly increase the user
base and demand highly available system resources. The effort to acquire and implement
these IT infrastructure components is underway. Implementation of this effort will enable
the exchange to have a highly available and
scalable IT infrastructure capable of meeting
current 30 market data display units will soon
grow to 180 to expand outreach to 150 small
markets and cities across the country. The new
display units come built-in with GSM modems
to allow wireless transmission of market data
to these display units in case of fixed line ADSL
connection failures. The rollout of these display
units has started and planned for completion in
early 2012.
Enhanced customer self-service capabilities –
There are currently limited self-service capabilities for ECX members and their clients to obtain
business information including commodity deposit/pickup status, warehouse receipt status,
and related information. Furthermore, there
continues to be more paper work to provide
such information as change of Member Client Agreements (MCA) between member and
clients, and driver information required to issue pickup notices. As a result, service to our
members and their clients require paper work
and demand increased ECX support staff as
our business grows. Systems to provide such
information using information kiosks, Short
Message Service (SMS), and Interactive Voice
Response (IVR) will continue to be rolled out
starting mid 2011.
Online trading supporting spot, forwards and
futures – The need for price risk management
through the use of deferred delivery contract
is paramount to any thriving exchange – our
market actors are also demanding it. Market
liquidity and participation by market actors
will substantially increase by offering such contracts and supplementing our current “open
outcry” Trading Floor with online electronic
trading platform. To “level the playing field”,
trading centers strategically located at regional
market towns will also be established allowing
rural market actors to trade directly without
having to rely on floor representatives. Given
the complexity of this initiative and lengthy
procurement process, implementation will be
phased and start at the beginning of 2011.
These initiatives and others being envisioned
by the ECX IT Division will undoubtedly make
ECX among the leading exchanges in Africa
and the world. The role IT plays will continue
to be crucial and integral to the growth and expansion of ECX for years to come.
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