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The Ethiopian Commodity Exchange (ECX), which
launched live trading on April 24, 2008, has
procured 11 price display screens at a cost of one
million dollars.
Chief Executive Officer of the exchange, Eleni Z.
Gebremadhin (Phd), told Fortune that the
screens, procured from Middle East and China, have
already reached Addis Abeba.
In order to reach the all market players and the
general public, the electronic price displays will
be erected at eleven regional towns’ market places.
Nazareth, Baher Dar Awassa, Nekemet, Jimma, Dire
Dawa, Baherder, Dessia, Shashemene, Gondar Harari
and Mekele are the regions that will have the
displays.
These towns were chosen because they have access to
a fiber optics technology and access to electricity.
“We believe that the displays will be installed
within two months,” said Eleni
“The reason for the delay in erecting the displays
is related to ETC’s network coverage and
electrification of the area where the displays would
be installed.”
The boards will be networked to the ECX central data
centre through ETC infrastructure so as to exchange
data every four seconds, she said.
To display the prices successfully and to reach the
joint ECX and government-planned goal, the IT system
should be faultless. However, Eleni is skeptical of
the dependability of ETC’s network.
“It is hard to rely on ETC’s network. But, the
officials of the corporation were
very cooperative in setting up a connection in a
place that we preferred”, she said.
Currently, ECX only reaches places that have optical
fiber connections; however it is planning to reach
200 districts of the country within a year.
Fiber optic is the fastest way of transferring data,
audio and video, at the same time. To help Ethiopia
with the technology, ETC has started installing the
fiber optic. However, it is not progressing
according to its plan. This limited fiber optic
coverage may slow down the speed of the commodity
exchange, but Eleni has been trying to use the
wireless connection system of the corporation,
called V-SAT.
Moreover, ECX plans to provide free a SMS price
dissemination system and Interactive Voice
Recognition (IVR) to its registered members.
At present ECX has sold seats to 60 approved
members, drawn mostly from the private sector, such
as exporters, domestic traders, processors and three
cooperative unions, according to a press statement
released on May 9.
The three cooperatives represent a total of 126,000
farmers, under processors there are 10 firms,
including flour and food processing factories and
there are 42 exporters.
According to the press statement, purchasing a
membership seat has the requirements of a valid
trading or commercial license in the commodity
business, financial net worth, a training and
certification examination, a refundable security
deposit and a membership seat price of 50,000 Br.
The ECX trading floor relies of “open outcry” price
bidding where all interested sellers and buyers
verbally negotiate simultaneously during trading
hours. Only ECX members, or their authorized
representatives, can use the ECX trading system on
behalf of themselves or on behalf of clients.
Commodity exchanges first created in Chicago, United
States, in 1948 provide a centralized trading venue
for businesspeople who are members. They also
disseminate market information instantly, collecting
statistics, publishing price quotations and setting
rules and standards for trading.
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