CONFERENCE ON
TRADE AND
DEVELOPMENT
3 September 2007
The views expressed are those of the author and do not necessarily reflect the views of the UNCTAD Secretariat, nor do they imply the
expression of any opinion whatsoever on the part of the secretariat of UNCTAD concerning the legal status of any country, territory,
city or area, or of its authorities or concerning the definition of its frontiers or boundaries.
The Ethiopia Commodity
Exchange (ECEX)
...Making the Market Work for All
Eleni Gabre-Madhin
1 September 3, 2007
2
ECEX…An idea whose time
has come
As Ethiopia is poised to transform its agrarian
economy, so too must Ethiopia’s marketing system
take the country into the new Millennium.
It is time to enter the modern age of globally
connected trading systems, relying on technology
and know how, while tailored to Ethiopia’s realities
and conditions.
It is time to forge a new partnership between the
private and the public in the new arena created by
market liberalization.
3
The Vision
4
Current grain market structure
SMALLHLDR (SS) STATE FARM (SF) COMMERCIAL (CF)
BROKERS PROCESSORS
RETAILERS
5 CONSUMERS: DOMESTIC
Structure with Exchange
SMALLHOLDERS 95% STATE FARM COMMERCIAL (CF):
8%
ASSEMBLERS COOPS EGTE
WHOLESALERS (SURPLUS)
RETAILERS
6 CONSUMERS: DOMESTIC
Why Ethiopia gains
Commercialization of smallholder agriculture is core
pillar of poverty reduction strategy (currently 28%
marketed out of production)
9
ECEX…An Ethiopian
Exchange for Ethiopia
10
A Hybrid Model: Public-Private
Trading System
EXCHANGE
MEMBERS Remote Access
Grade
13 Warehouse
certification receipt
Beyond agriculture: From a sack
of grain to a sack of money
Finance Information
Technology
PRODUCT
Warehouses=Banks Power the system
Legal Infrastructure
Self-regulatory
14 Electronic trade
Pushing the frontiers on many
fronts: The Firsts
First time push of 3rd party grade certification
in extensive way into the rural arena
First time reach of market information into the
rural arena
First time recognition of intermediation
- the brokers
First time recognition of self-regulation
- the national association and the exchange
o First time major push on financial system:
clearing house function
o First time push of ICT into the market:
electronic trading
15
Creating new opportunities:
spillover impacts for economy
More technology, better designed
means improved access to the market
mobile telephony
satellite radio
other technologies
Banking: New financial products tailored to
small market players
Services: Transport, logistics, certification,
insurance, academic
Role
16 of self-regulation by trade associations
Trajectory from here on: we
are moving fast!
ECEX site
Trading system development in
progress
Contract design in progress
Proclamations to establish ECEX
and Exchange Authority passed
in early July 2007
Active training and
communications campaign
Membership drive to start
17
Starting Bell by Millennium
Harvest 2000 (December 2007)
The Winds of Change are
Here - Can Ethiopia Do It?
Necessary political will
Commitment by all actors
Catalyst for change
19