A new enterprise that will have the mandate and responsibility to mange Ethiopian Commodity Exchange’s (ECX) warehouses is going to be established by Ministry of Trade (MoT).
As per the Chief Strategy Officer at ECX, Abenet Bekele, the initiation to to separate the two tasks and bodies came from the Ministry.
Kebede Chane, Minister at MoT, noted the Ministry has concluded preparing a draft directive and it is ready to present it to stakeholders for discussion.
It was by a committee compromised of experts from ECX, Ministry of Agriculture (MoA), representatives from the regional Trade and Industry Bureaus and Ethiopian Commodity Exchange Authority (ECXA) that the directive was drafted.
The newly to be established enterprise will have the mandate to construct new warehouses and manage them along with other the existing 60 warehouses. The existing warehouses are ones ECX rented from the Ethiopian Grain Trade Enterprise (EGTE) and other private owners.
Kebede noted the justification for separating the management task is that ECX will be expanding and opening branches starting the coming September in regional towns; including Adama, Hawassa, Jimma, Gonder and Humera.
According to Fortune, there were reports about ECX facing challenges in warehouse management. The newspaper claimed quality of the product traded on the floor would be different upon delivery at the warehouse for which the workers at warehouses are accused of removing high grade commodities from their sacks and replacing them with lower grade qualities, with the sacks still displaying the high grade labels.
Commenting on this the Minister said, separating the tasks will minimize the problems of the ECX related to handling the processes both at the trading floor and warehouses.
For the purpose of ensuring quality and reducing wastage during the commodities at warehouse stage, the enterprise will deploy Inventory Warehouse Management System.
Kebede noted the committee drafted the directive based on the South Africa’s and Colombia’s experience. He furthered discussion on the draft material will be held in the coming two weeks between ECX, MoT, MoA and ECXA. The theme of the discussion is going to be whether the new enterprise should be under the MoT or ECX.
ECX was established in 2008 with 100 members. But in the last fiscal year it increased its members to 346, out of which 33 are cooperatives and unions with 2.7 million small scale farmers under them.
In the just ended fiscal year, ECX had 14, 725 buying and selling clients with a trade volume of 586, 000 tons. It generated a revenue of 26.2 Billion Birr.
Source: Fortune
