Processors can bypass ECX to buy commodities


The Ministry of Trade is drafting a new law that allows processors to buy selected commodities, in places other than the Ethiopian Commodity Exchange (ECX).
Reliable sources at the Ministry told Capital that the Ministry is drafting a law giving permission to processors who add value to products (like haricot beans and sesame) to buy those products outside of the ECX .
Sources said that the law would allow three products, including those stated, to be purchased outside, whereas in the past these commodities were only available through the ECX.
According to the sources, the new law was drafted by the Prime Minister in order to alleviate quality and product shortages.
“The main aim of the law is to give the opportunity for processors to get quality products that are not blended with other types of similar products,” sources said.
The new law will allow the traders to get the product directly from farmers rather than purchase them through the Exchange.
Previously processors have complained that they could not get quality or unblended products since products were by law exclusively traded at the Exchange.
ECX officially launched in 2008 with agricultural commodities is currently trading coffee, sesame, and haricot beans exclusively and it is also trading other agricultural products like wheat and maize.
According to sources, the law will be applicable only to processors, while other trading actors at the ECX, like exporters, must continue to use the trading floor to buy these products.