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Ethiopia to launch fully automated Commodities Exchange
Tamrat G. Giorgis
Ethiopia’s first organized commodities market is to be housed in the left wing of the building in the picture, owned by Alsam Plc, a company whose major shares are held by Saber Argaw. The buildings, located on Smuts Street, near Mexico Square, were estimated to cost close to 50 million Br, according to sources. The ground and the first floors are already occupied by Dashen and United banks, while the Ministry of Agriculture and Rural Development has recently leased the middle two floors, with a total size of 1,000sqm, for nearly one million Birr a year. Far from the traditional coffee market that has a resemblance of organization – barely modern with its one personal computer – the Ethiopian Commodities Exchange (ECEX) will have fully automated operation, putting a large electronic billboard indexing prices on a daily basis. Coffee, sesame, haricot beans from cash crops and teff, wheat and maize from traditional grains are the first commodities that will hit the electronic billboard, thereby helping the inefficient commodities market get “order, transparency and low cost”.
Studies estimate that Ethiopian farmers produce 10 million to 12 million quintals of grain a year, but only a third of it makes it to the market. Farmers across the country are deprived of reliable and timely information on what the market offers for their products, with 40pc of the grain believed to be rerouted through the capital from surplus to deficit areas. The ECEX is designed to address this issue after electronically connecting 10 warehouses in various parts of the country, the largest being in Addis Abeba. There will also be 20 remote virtual trading sites, and 200 rural market electronic information boards that will get the same data as in the capital. Reliable sources told Fortune, the project head, Eleni G. Medhin (PhD), deliberately picked this building for its proximity to Merkato’s Ehel Berenda, the largest grain market in the country. ECEX is scheduled to be launched in September 2007.
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