Recently, the Ethiopian Commodity Exchange (ECX) has signed a modern payment system agreement with Zemen Bank.
ECX has been signing similar agreements with several banks operating in the country in its quest to facilitate an effective interaction of commodity traders. Its recent agreement with Zemen Bank aims to build a modern marketing system for farmers, suppliers, exporters and cooperatives in the trading system.
After the signing of the agreement, ECX CEO Wondimagegnehu Negera said that the signed agreement promotes the trading system and helps ECX customers to widen flexible service provision.
Currently, ECX has signed a partnership agreement and been working with 17 banks including Zemen Bank. The agreements have been playing a promising role in ensuring the benefits of farmers by avoiding different chains of commodity suppliers and unnecessary time and money wastage in their quest to sell their produces, he added.
According to him, working jointly with banks is also contributing its part in rendering reliable service that helps suppliers avoid loss.
He added that the modern payment process agreement between ECX and the banks also provides an option to enable traders to run their payments more efficiently and expand access to the transaction.
“Over the past 11 years, the amount of money transmitted through the 16 banks that have partnered with the market has reached 255.3 billion Birr and the amount paid to sellers by the market has reached 247.5 billion Birr.”
ECX has built trust in the trading system by facilitating the transfer of finance and ownership year after year. It started the payment order and delivery system with two banks, Commercial Bank and Dashen Bank.
“This has made ECX become one of the institutions that have made a huge contribution in cultivating modern trading system among suppliers and buyers.”
The modern payment agreement between the ECX and the modern bank plays a role in maintaining a safe payment system and a healthy cash flow in the modern trading system.
Wondimagegnehu added that the agreement will do its part to ensure a secure payment system in the modern trading system.
Accordingly, ECX traded over 101,000 tons of commodities worth 5.12 billion Birr only within the past month [December]. It has sold 101,948 tons of products including sesame, coffee, white and red Haricot bean worth 5.12 billion Birr in December.
Some 52, 598 tons of sesame was sold at 2.24 billion Birr per month, while Gondar sesame accounts for 90 percent of the transaction volume. Compared to the same period last year, the trading volume and the transaction price increased by 34 percent and 26 percent respectively, while the average price dropped by five percent.
Similarly, 8,565 tons of white Haricot Bean and 8,100 tons of Mung Bean were traded at 176 million Birr and 270 million Birr respectively. 30, 416 tons of coffee sold during the same month with 2.47 billion Birr.
On the other hand, 18,226 tons of soy were marketed and traded at 22 million Birr. Overall, the cereal and vegetable cereal production has shown improvement compared to the same period last year.
It was also stated that the market is ready to renegotiate the corn contract after 11 years with the aim of improving its marketing contract and providing warehouse loan services.
Ethiopian Commodity Exchange was established in April 2008 with the sole objective of facilitating commendable commodity exchange. It has been providing its services to farmers and traders since establishment.
The Ethiopian Herald January 23/2020
BY TEWODROS KASSA
