The Ethiopia Commodities Exchange (ECX) is reduced the expiration date of warehouse receipts issued for coffee from 30 days to 20 days as of May 9, 2013.
The ECX governing body, Ethiopian Commodity Exchange Authority (ECEA) has approved the change with others relating to moisture adjustment, the amount that should be contained in a bag, and the cost of handling goods.
ECX introduced these changes following a series of studies it undertake during the current year based on transaction data from the past 18 days, according to Anteneh Assefa, CEO of the Exchange. The study revealed that 50pc of members storing coffee at ECX warehouses make a sale within eight days and 90 percent of members within 20 days.
ECX senior executives including Anteneh Assefa, CEO , Abenet Bekele, Chief Strategy Officer (CSO), and Shimeles Habtewold, Chief Compliance Officer (CCO) discussed the amendments with members of the Exchange on Tuesday, April 31, 2012.
Members who sell coffee must store it in ECX warehouses before the expiry date or face the daily penalty which amounts to 3.5 percent of the current trade-able value of the coffee they have stored in ECX warehouses.
Currently nine of the 16 ECX warehouse sites store coffee. The warehouses at these sites have the capacity to store 1.4 million quintals at a time.
Another changes introduced by the Exchange relates to moisture adjustment and the weight differences of the coffee that suppliers bring and buyers take from the warehouse. Suppliers are allowed to bring coffee to the warehouse when the moisture is equal to or less than 11.5pc.
Further adjustments will be made based on the weather conditions of ECX warehouse locations, Anteneh said.
The rates for handling goods at ECX warehouses has also been adjusted from 2.10 Birr a bag for buyers and 2.70 Birr for sellers to flat rate of 3.50 Birr.
“The ECX subsidizes the cost of handling goods which even the 3.50 Br does not cover,” Anteneh told Fortune.
The last amendment requires that a bag of washed coffee without parchment must be 85Kg, the same amount as for unwashed coffee. The previous contract only required a net weight of 60Kg in a bag for washed coffee, with or without parchment.
Source: Fortune
