How Ethiopian Commodity Exchange Reduces Marketing Problems for Coffee Products.

philipos lamore bambore


Before ECX was established agricultural markets in Ethiopia had been characterized by high costs and high risks of transacting, forcing much of Ethiopia into global isolation, Land scarcity, coffee diseases, lack of pesticides, poor  market information, inadequate credit services, poor  infrastructure, lack of drying and packing materials, presences of illegal traders, poor quality coffee, lack of  government support, market instability, tax burden, truck delay at the auction market,  shortage of spare parts, inadequate supply of fuel and  electric power and technical knowhow of machine  operator. With only one third of output reaching the market, commodity buyers and sellers tended to trade only with those they knew, to avoid the risk of being cheated or default. Trade is done on the basis of visual inspection because there was no assurance of product quality or quantity, this drove up market costs, leading to high consumer prices. For their part, small-scale farmers, who produce 95 percent of Ethiopia’s output, came to market with little information and are at the mercy of merchants in the nearest and only market they, know, unable to negotiate better prices or reduce their market risk.

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ISSN : 2251-1555