The Ethiopia Commodity Exchange (ECEX)

The Ethiopia Commodity Exchange (ECEX) Eleni Gabre-Madhin August 23, 2007

There is nothing as powerful as an idea whose time has come Victor Hugo

ECEX…An idea whose time has come ,[object Object],[object Object],[object Object]

Current grain market structure SMALLHLDR (SS) STATE FARM (SF) COMMERCIAL (CF) CONSUMERS: DOMESTIC RETAILERS WHOLESALERS (DEFICIT) BROKERS WHOLESALERS (SURPLUS) RURAL ASSEMBLERS COOPS EGTE EXPORTERS PROCESSORS FOOD AID AGENCIES

Structure with Exchange SMALLHOLDERS STATE FARM COMMERCIAL (CF): CONSUMERS: DOMESTIC RETAILERS WHOLESALERS (DEFICIT) COMMODITY EXCHANGE WITH MEMBER-BROKERS WHOLESALERS (SURPLUS) ASSEMBLERS COOPS EXPORTERS PROCESSORS FOOD AID AGENCIES EGTE

Why Ethiopia gains ,[object Object],[object Object],[object Object],[object Object],[object Object]

Impact on smallholder livelihoods? ,[object Object],[object Object],[object Object],[object Object],[object Object]

ECEX…An Ethiopian Exchange for Ethiopia ,[object Object],[object Object],[object Object],[object Object],[object Object]

Integrated ECEX activities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Design Options of ECEX (1) One exchange, one warehouse, one grading center (2) One exchange, several warehouses/ grading centers (3) One exchange with satellite exchanges and warehouses/grading centers

Design of ECEX ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The ECEX Edge… Integration COMMODITY EXCHANGE COMMISSION Laws and Regulations Market Information Remote Access Arbitration Tribunal Trading System Data center Exchange Warehouses Grade certification Warehouse receipt Exchange Clearing Banks Clearing and Settlement National Exchange Actors Association EXCHANGE MEMBERS

Trading mechanism Buyer instructs broker to post bid Farmer, cooperative, or trader brings product to Exchange-operated warehouse The warehouse draws samples and issues a Product Certificate and Warehouse Receipt Seller instructs broker to post offer ECEX Trading Floor Order Matching ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],ECEX Back Office Buyer deposits funds into settlement account in Exchange partner bank

Beyond agriculture: From a sack of grain to a sack of money PRODUCT Finance Information Technology Legal Infrastructure Warehouses=Banks Power the system Self-regulatory Electronic trade

Market Information ,[object Object],[object Object],[object Object],[object Object]

Creating new opportunities: spillover impacts for economy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Trajectory from here on ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Winds of Change are Here - Can Ethiopia Do It? ,[object Object],[object Object],[object Object],A winning value proposition to…. Empower farmers’ choices, grow our agriculture, and transform Ethiopia

The future awaits… YICHALAL !!

The Ethiopia Commodity Exchange (ECEX)

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The Ethiopia Commodity Exchange (ECEX)