The Ethiopian Commodity Exchange (ECX) has experienced a significant decline in both the volume of export-standard products and overall trading activities, according to the latest audit report released by the Office of the Federal Auditor General (AG). The findings were presented to the House of Representatives as part of the 2023/24 fiscal year audit.
The report highlights critical deficiencies in ECX’s product intake, inventory management, and trading systems. Data shows that the volume of export-standard products traded on the ECX platform dropped by 19% to 29% between the 2014 and 2016 Ethiopian fiscal years, ranging from 47,529 to 59,813 metric tons.
The audit revealed major problems with ECX’s storage infrastructure. Many warehouses are vulnerable to flooding and have leaking roofs, while lacking essential facilities such as parking and sample pick-up areas for vehicles transporting products. These shortcomings undermine the ability to maintain product quality and provide timely services.
Although ECX has identified 25 agricultural products for trading and contracted warehouses across several branches—including Saris, Adama, Hawassa, Dilla, Jimma, and Bonga—these facilities only accept a limited range of produce, restricting market participation.
Between 2014 and 2016, the volume of agricultural yields received by ECX dropped sharply, with decreases ranging from 13% to 49%, falling from 40,049 to 294,805 metric tons. Correspondingly, the volume of production traded through ECX declined by 14% to 51%, from 42,874 to 314,446 metric tons. This downturn led to a reduction in transaction liquidity, which fell between 13% and 30%, decreasing from 3.7 million to 11.9 million birr.
The report attributes these declines partly to ECX’s struggle to expand its membership base, both formal and informal. Many traders have shifted to alternative trading systems, further reducing volumes traded on the ECX platform.
The ECX plays a vital role in Ethiopia’s agricultural exports, particularly in coffee and sesame, which together account for a large share of the country’s export revenue. However, recent years have seen fluctuating export volumes and declining international commodity prices, affecting overall export earnings.
Experts and stakeholders have pointed to systemic issues such as product grading inconsistencies, delivery delays, and pricing mechanisms within the ECX as factors contributing to export underperformance. While the ECX maintains it provides transparent market data and facilitates trading, some exporters argue that quality control and operational inefficiencies hinder competitiveness.
