The Ethiopian Commodity Exchange officially has begun trading soybeans and chickpeas. The occasion was recognized at a ceremony held on Wednesday January 16 at the trading floor located around Mexico Square.
Recently, the trading floor stated that chickpeas and mung beans were arriving at its warehouses so that trading could begin. Soybeans will be traded exclusively, while chickpeas are optional.
Currently, ECX is handling the exclusive trading of coffee sesame seeds and white pea beans at its modern market.
These three products are exclusively traded at ECX, while soybeans would be the fourth product even though mung bean was expected to become the fourth product sold at the trading facility.
Within two weeks the ECX warehouses received close to 20 thousand quintals of soybeans. This is an indication that trading the crop via ECX should be a popular endeavor, according to Wondimagegnehu Negera, CEO of ECX.
In the first four trading days 2,550 quintal of soybeans were traded before the official launching ceremony.
Since December 31, 2018 ECX began receiving the two commodities at nine warehouses in different locations.
The statement ECX sent to Capital indicated that in the past five years the production of chickpeas and soybeans in the country has reached 440 thousand and 76 tons per annum respectively. On average the country exports 54 thousand tons of chickpeas, which is one of the staple food items in the country, and 58 thousand tones of soybeans every year. In the past budget year, the country has earned USD 91 million from exporting the two crops.
The production of soybeans has dramatically increased in the past couple of years. Different surveys indicate that the area covered by the oil bean has increased. Production has risen as well.
A 2014 study undertaken by Mekonnen Hailu and Kaleb Kelemu of the Ethiopian Institute of Agricultural Research found that the total hectare of land under soybean production during the last 10 years (2004-2014) has increased by 10 fold; while the total volume of production during the same period increased by 21 fold.
Experts in the sector recently told Capital that the production for the current harvest is expected to be high since several areas in the western part of the country are currently covered by soybeans. “I have information that in the past rainy season several areas in Welega, Benshangul Gumuz, west Amhara including Metema, which is new to soybean production, have been covered by the oil bean,” an exporter who requested anonymity said.
He supported ECX’s decision to begin trading soybeans. “It would harmonize the price which is different than what we have observed previously,” the exporter who is also a consultant in the oilseeds and pulses sector explained. “During one period last year a quintal of soybeans was 900 birr but the price dramatically increased to 1,700 birr within a month when the number of buyers increased suddenly. The price will stabilize when ECX begins trading as they give a limited percentage up or down floor prices.”
India, Vietnam, China, Canada and Pakistan were the major destinations for the crop during the past export season. Experts at the export sector explained that clients purchasing Ethiopian soybeans particularly in India really like the Ethiopian product due to its multiple varieties and not using GMO as opposed to West African countries. “Buyers in India give from ten to 20 USD more prices per ton for Ethiopian soybeans than other west or southern Africa products even though Ethiopia’s product is very limited,” exporters told Capital.
A year ago Ministry of Trade ordered ECX to undertake the exclusive trading of red kidney bean and mung bean, however it postponed this for an unspecified period because exporters claimed that they needed more time for preparation. Recently the ministry sent a letter to ECX to introduce the exclusive trading for mung bean, which has been optionally traded on the floor during the last five years, as soon as possible.
The CEO has also indicated that in the near future the trading floor will commence optional trading of Niger seeds and beans.
ECX began operation in April 2008.