5 membership seats of Ethiopian Commodity Exchange (ECX) has been sold at a bid floated for the public. The highest bid price was 2.5 million Birr while the lowest was 2 million Birr. Nonetheless, the highest bid shows decline when compared to previous auction, which attracted a bid price of 2.8 million Birr.

9 years ago, the founding members bought their membership seats for only 50,000 Birr.

The seat grants the members the right to trade on the Exchange either on their own behalf or on behalf of a client depending on the type of membership.

It was back in April 2008 that ECX was established by an advisory board headed by Eleni Gebre-Medhin. It aimed at establishing a modern, secure and efficient trading system by creating a marketplace that serves traders, from farmers to buyers.

According to Fortune there are 2 types of memberships. Full members have seats which are permanent and freely transferable. They can also trade in any commodity. On the other hand, limited members have memberships that are limited for 1 year to a specific commodity and limited only to buying or selling.

Both memberships are divided into intermediary and trading memberships, where members can trade on their own or under a client’s account or only on their own account.

According to the Exchange’s CEO, Ermias Eshetu, ECX floats bids of seats for different reasons. He furthered: “As for the types of memberships, if the vacated seat belongs to a full member, it is sold as a full membership, and if the seat belonged to a limited member, it is sold as a limited membership.”

“We are looking at the future right now at ECX. We have plans to move from an open cry market model to electronic trading and then into market analysis,” Ermias added. “We want our members not just to be traders, but to become institutions that can protect and lead the commodities market, and we want to help them build their capacities.”

Source: Fortune