ECX announces over 20% trading value, volume increase

Addis Ababa, June 29 (WIC) – The Ethiopian Commodity Exchange (ECX) announced overall trading volume and value increase of 23 and 21 per cent respectively for the fiscal year from July 1, 2011 to June 30, 2012.  

As it passes the four year mark since the start of operations, the operational and financial performance of ECX remains solid over the past fiscal year.

In a statement sent to WIC today, ECX said trading volume have increased overall by 23 per cent over last year to 601,000 tons while trading value increased overall by 21 per cent to reach 21 billion birr.

The statement said the performance varied significantly by commodity with sesame volume reaching 303,000 MT (38 per cent growth), overtaking coffee, which only increased by 3 per cent to 234,000 MT.

“Coffee trading volume did not follow the expected trend this fiscal year due mainly to the effects of a combination of extremely volatile international coffee prices, ranging from more than $3 per pound at the start of the fiscal year to roughly $1.50, and adverse weather, both of which delayed the start to the coffee trading season,” Dr. Eleni Gabre-Madhin, Chief Executive Officer, said in a statement.

ECX also boosted a “stable and healthy” financial outlook as operational revenues increased by 34% over last year, to reach 226.4 million birr. Net earnings grew by 31%.

The exchange auctioned an additional 91 membership seats during the fiscal year for the second time, resulting in the value of ECX membership increasing dramatically from the original Founding Member price of Birr 50,000 in 2008 to an average purchase price of Birr 1.35 million at the end of 2011.

With 329 full and active members, ECX serves over 10,400 clients, of which 40% are located outside of Addis Ababa.

“We are excited that the number of primary cooperative societies and farmer cooperative unions participating in ECX has nearly doubled from 111 to 193, and their trade volume has increased by 48% over the last year,” Bemnet Aschenaki, Chief Strategy Officer, said.

The statement said ECX project looks to grow further with the completion of World Bank-funded IT Infrastructure project, ICF-funded IT software upgrade project, EU-funded farmer market access project, Starbucks-Geocertify coffee traceability project, and the futures/forwards trading project.

Higher costs and performance delays in warehousing operations owing to weak infrastructure and telecommunications and power failures, as well as staff performance issues and IT system glitches were the key challenges in the fiscal year.

According to the statement, ECX plans to increase commodities and services. Four major new initiatives including preparations to outsource warehouse operations, the introduction of electronic trading, new direct access programs for farmers and cooperatives, and a new design project for the ECX corporate headquarters building to be located in the vicinity of the National Theater are included in the plan.