The Role and Challenge of Ethiopian Commodity Exchange (ECX) on Coffee Supplies and Marketing in Ethiopia

Abstract

The objective of the study was to examine the role and challenge of ECX in coffee supply by measuring the core function ECX. The study used primary data collected from 120 respondents and analyzed through descriptive statistics and multiple linear regression. The study used six core function of ECX i.e. market information, enabling competition, market development, price discovery, and storage and grading and facilitation of physical commodity to measure the role and challenge of ECX. The results of the descriptive statistics showed that among ECX‘s core function, facilitation of physical commodity trade service was given the highest score while the storage and grading service was given the least score by the respondents. The multiple linear regression result indicate that three independent variable (Market information, market development and facilitation of physical commodity trade) were found to be significantly and positively influence the coffee supply and performance. Facilitation of physical commodity trade was significant at 1% while market information and market development were significant at 10%. Even though ECX have contributed to coffee supply and marketing performance, it is not free from a problem. The challenge are associated with service delivery system like grading system to test the quality of coffee was not uniform and biasedness one client from the other and wastage of time to test and low quality grading widely observed. ECX experts also indicate that absence of skilled man power, low government attention and capital shortage also another challenge in coffee marketing and supply. ECX should improve the service of storage and grading by introducing new technology and by maintaining transparent service. ECX should also build better warehouse management system in order to avoid wastage and quality deterioration.