Ethiopian Commodity Exchange (ECX)

Target SDGs

Target Users (Target Impact Group)

Household

Distributors / Implementing Organizations

Ethiopian Commodity Exchange (ECX)

Countries

Ethiopia

Manufacturing/Building Method

N/A

Intellectural Property Type

Select Type

User Provision Model

ECX - Membership has many different types of users. Information to apply for either a client or limited membership is available on the membership page.

Members and clients are active in the market. They also have a number of registered buyers.

There are also the interactions of the farmers and co-ops that are utilizing the market information for crop planning, inventory, and prices.

Distributions to Date Status

Since 2015, the SMS service currently processes over 800,000 transactions per month while the IVR receives over 1 million calls/month.

Design Specifications

Ethiopian Commodity Exchange (ECX) was created with the purpose of establishing a transparent commodity market for agricultural goods in Ethiopia. It started with a system to control the process from the farmers to export, where warehouses were established to sample, weigh, and grade commodities and issue goods received note. The warehouse and quality operations have been spun off into a separate operation Ethiopian Agricultural Commodities Warehousing Service Enterprise with the goal of focusing on modernizing the market platform and ensure the quality of commodities.

In order to provide access to market information, ECX utilizes a diverse mix of communication methods. These include rural-based Market Information Tickers, mobile phone Short Messaging Service (SMS), Interactive Voice Response (IVR) service, Mass media (TV, Radio, Newspaper), and online market information.

In 2015 ECX rolled out its e-trading platform allowing for more transactions and enabling members to make secure trades from anywhere. In order to provide more transparency in the sourcing of commodities, ECX introduced a national traceability system (eATTS) to help track the footprint of the products.

Product Schematics

Technical Support

Provided by ECX.

Replacement Components

N/A

Lifecycle

N/A

Manufacturer Specified Performance Parameters

ECX seeks to connect all buyers and sellers in an efficient, reliable, and transparent market.

Vetted Performance Status

Hernandez et al, concludes that despite glowing reviews of ECX, it has little impact on the Ethiopian coffee price dynamics. They conclude that this is due to the fact that Ethiopia already had a well-functioning coffee market and that the efficiency that it introduced may be outweighed by the cost and regulation of the market. Francesconi and Heerink's research shows that while disputes still exist, the formation of ECX has reduced disputes over renegotiation with suppliers. Meijerink et al, found while there is significant potential to reduce poverty, there is the risk that access to the market was more advantageous to the larger scale farmers with easier access to resources than smallholder farmers and risked furthering the divide. They recommended that policy should be instantiated to ensure access by smallholder farmers and co-ops was enabled by the market.

Safety

N/A

Complementary Technical Systems

N/A

Academic Research and References

Compliance with regulations

ECX was founded under Ethiopia Commodity Exchange Proclamation (No. 550 of 2007).

Evaluation methods

The Exchange is evaluated by the volume and value of goods transacted through the platform.

Other Information

Ted Talks about the Ethiopian Commodity Exchange.

1. Eleni Gabre-Madhin - Ted talk "A commodities exchange for Ethiopia"
2. Building a big, bold, beautiful market | Eleni Gabre-Madhin | TEDxWBG

Other publications

1. International Food Policy Research Institute report
2. IFPRI Discussion Paper - Purpose and Potential for Commodity Exchanges in African Economies
3. ICAE - The Ethiopian Commodity Exchange and the coffee market: Are local prices more integrated to global markets?