Traders at the Ethiopian Commodity Exchange (ECX) are saying that a monopoly leading to few players on the trading floor is harming their business.
The traders that Capital interviewed anonymously said that white pea beans are being supplied by only three companies and sent out of the country by one sole exporter.
These traders are buying the bean for export but they say that three suppliers have monopolized white peas. They have taken their supply chain and stretched it to primary marketsin local towns. “Via their brokers at the local markets they collect the product at an extraordinary price which forces other suppliers to leave the business,” they argued. “Currently the daily demand is about 1,100 quintals of white pea beans but the product available on the trading floor is insignificant,” one of the buyers that Capital interviewed said.
“Even though we don’t have information about the product at the ECX warehouse for white pea bean like coffee we are confident that there is a surplus of white peas at the ECX warehouse but the suppliers only make a small amount of product available during the daily session which inflates the prices unreasonably,” a source at the trading floor claimed. He added that on Friday November 8 there were only about 100 quintals of white pea beans available for trading.
They claimed that about four years ago the trading floor been applied a system allowing a single supplier to trade with 50 buyers and farmer unions to supply the product on the trading floor with favorable laws compared with single buyers or sellers. They argued that it was a good system which solved problems in the past. “But few traders organized the farmers under their network and supply the product for sellers as a single client. This is the way to control the primary market that few traders at ECX applied,” they claimed.
Recently the Ministry of Trade and Industry has issued a directive that it would revoke a trading license and sue those exporting agricultural products under the price they bought it at ECX.
“Even though the directive is correct to harmonize the trading and control the price escalation at ECX, at the same time the current monopoly affects our export business,” they claimed.
They said that before the effectiveness of the directive they bought the white pea bean for up to 2,500 birr and exported it for USD 650 per ton.
Currently the price is about 1,900 birr. Sources told Capital that some ECX traders have brought the case to the Ministry of Trade and Industry on Thursday November 7.
Representatives at Ministry of Trade and Industry (MoTI), confirmed that the traders went to the Ministry to express their concerns.
Mesfin Abebe, Director of the Crop Products Marketing Directorate atMoTI, argued that the period is a transitional time from the past season and upcoming harvest due to that the product might not come sufficiently.
He said that is not due to a monopoly by some group of individuals. However, traders claimed that the white pea bean has been sufficiently observed at the ECX warehouse, Mesfin argued that there is a controlling mechanism based on the ECX operation. “ECX has given a maximum period of storage for any product,” he added.
He said that MoTI has applied the controlling mechanism of export price based on the international rate as of October 18. It has shown the price of products at the exchange floor has been reduced.
The export contract registration and administration directive no.21.2019 forced exporters to export their product not lower than the price that they bought it from the local market. It has also ruled MoTI will also evaluate the export documents in addition to banks.
If the exporters move against the rule it will impose a penalty up to revoking the business license.
NetsanetTesfaye, Public Relations head at ECX, said that based on the performance of October the bean supply was very small. “When I looked at the monthly report in my opinion it declined since it is the last period of the past harvest season,” he added.
Mesfin said that in the coming week there is a discussion with regions about hording products against the rules. “We will also look the cases if hording continues in the regions but regarding hording so far there is no problem in this case,” he added.
Greedy traders extorting pea bean business
ASSET PRICE INFLATION
Asset price inflation, particularly in the rich countries of the world system, has become pronounced. Increases in asset prices benefit those who are already well endowed. On the other hand, the mechanisms by which asset prices are systemically forced to go up dispossess the large majority of non-asset owning classes, i.e., the general populace. The main reason asset prices are going through the roof is because of plenty of easy money sloshing around in the system. To be sure, it is the global banking cabal that creates this phony and unearned money. The states via their central banks, sit on top of this criminal scheme. This rigged system works against those who sell their labor, physical or mental!
When the going gets tough, the strategy of the global financial system is to keep on inflating. ‘Inflate or Die’ is the enduring slogan of the money creators. It seems, it is the only thing they have up their sleeve. When the 2007 global financial crisis hit the world economy, the response was to flood the world with more phony/unearned money. To start with, the financial crisis was caused, first and foremost, by the massive accumulation of unsustainable debt permeating the whole global order. The burst initially occurred within the financial sector (Bear Stern, et al). Later on, the crisis manifested in real estate, subprime housing, etc. Instead of accepting market correction of the bubble, which would have been painful, the managers of the global order continued to pump even more money to postpone the day of reckoning. A decade later, the world ended up having ridiculous amount of phony money in circulation, prompting asset price inflation as well as the implementation of useless projects (bridge to nowhere, ghost cities, etc.), which are not commensurate with the logic of capital, i.e., capitalism!
When negative interest rates prevail, the message is clear. It means there is a glut of capital that is not finding its way into productive engagements. Hence, this massive capital, restricted as it were, to the existing universe of activities, props up the value of anything and everything. Housing prices go up, not because there is real effective demand on the ground, but because there is plenty of cheap money around to buy all and sundry. In the highly financialized world of the OECD (rich countries) companies are actually borrowing money to buy back their own shares from the equity market. This is facilitated because the central banks, in their infinite wisdom, have decided to lend massive amount of money with no interest. Share prices in stock markets, pumped up by the massive phony money created out of thin air, are appreciating without bound. Price/Earning (P/E) ratio, which used to signal the values of corporations, is no more relevant to the ‘masters of the universe’, as these crooks are derogatorily called. Entities with no track record of making money are valued in the billions of dollars. Peter Schiff, a well-known financial analyst explained in his latest podcast, ‘the markets aren’t making highs because the economy is good. It’s making highs because of the Federal Reserve’s easy-money policies.’
In the real world where people actually try to make their living, money is hard to come buy. Robotics, Automation, Artificial Intelligence are increasingly encroaching the world of work. Consequently, demand for labor is gradually receding. For example, the Japanese car market crashed by about 25% this year, even though the Japanese state is the number one printer of phony money in the world. For thirty years, the Japanese pumped trillions of (US dollar equivalent) phony money to their system, mostly to save their old relics, the Keiretsu collectives. The old keiretsu (keiretsu is a set of companies with interlocking business relationships and shareholdings) that were trailblazers in global production (in the late 1960s and 70s) gradually became uncompetitive, as a result of many things. It is quite instructive to study the reasons as to why these once formidable industrial juggernauts ended up being mere laggards in the world economy. This lesson is very important to countries like ours that are trying to emulate the East Asian development models. Instead of allowing the market place to clear the deadwoods from the economy, the Japanese politicos decided to bail out the Keiretsu amalgam. In Japan, the Keiretsu still sway massive political power!
To reiterate: All the money that is being pumped into the real global economy (by the central banks/states) ultimately end up pushing asset prices higher. Those parasitic entities connected to the money spigot reap the benefit of free money, while the global masses suffer the consequences, amongst which, spiraling inflation features prominently. Something has to yield. Here is the 18th most cited author of books in the humanities and social sciences in 2007, according to Thomson Reuters database. “…But I also want to argue that the inability to accumulate through expanded reproduction on a sustained basis has been paralleled by a rise in attempts to accumulate by dispossession. This, I then conclude, is the hallmark of what some like to call the new imperialism.” Prof. David Harvey. Good Day!
AALF and ASFW at Millennium Hall from November 9-12
All African Leather Fair (AALF) and African Sourcing Fashion Week (ASFW) opened on November 9 at Millennium Hall and will remain open until November 12.
Fashion fabrics firms, accessories, fashion and boutique stores, retail, technology / Machinery systems, printers, printing inks and accessories, home and household textiles, décor, crafts, gifts and accessories, hospitality industries of textile apparel, cotton, leather are participating on the 4th Africa sourcing and fashion week for “sustainability in manufacturing and labor” and 11th All Over 280 international manufactures and exporters from 25 countries including from Germany, Portugal and France and from the local industrial park are participating to show case their products and innovations on the fashion week which shows 20pc increased from the last year. More than 20 African designers are expected to connect with the international buyers and industries. More than 5000 visitors are expected on the event.
This year is different because it opens the door for both textile and leather industries to participate in the fashion week together.
Is organized by the trade and fair group in partnership with mess Frankfurt exhibition, ministry of trade and industry, Ethiopian textile development institute, and Ethiopian textile and garment manufacture association.
It was also announced that UNIDO, the United Nations Industrial Development Organization, will launch a project dubbed “Leather Initiative for Sustainable Employment Creation”. Funded by the EU, the project is to be implemented in partnership with the Ethiopian Ministry of Trade and Industry.
Beside the showcases at the hall, two workshops are being planned; “Tanneries improving competitiveness through environmental compliance, technology transfer and establishing strategic linkage” and “Ethiopia’s position in Africa’s leather industry” will be held with the participation of development partners, investors and stakeholders in the leather sector.
Sileshi Lemma, representative of the textile industries associations, this kind of practices can widely help to increase the relation between the local and foreign investors and the investment. “The sector is comparatively growing, however there are still lots of things to do as the nation has resources.” USD 155million has been collected from the textile sector last fiscal year.
Last year there were 207 participants and 5000 visitors.
The Leather Institute Development Deputy Manager, Hailekiros Debasay, said this event will create a road map to the local countries to be competitive in the international market by sharing experiences of other countries. USD 134 million has been generated from the textile sector last fiscal year.
As sources indicate, the country has about 2.5 percent of the world livestock population with about 57.83 million cattle; 28.04 million sheep and 28.61 million heads of goat. Every year, the nation produces 5 million tons of hides, 8.1 million tons of sheepskins and 7.5 million tons of goat skins. Currently, both industries are thriving remarkably. Companies from Italy, China, UK, India, and Turkey are operating in the sector.
Bogalech Gebre 1960-2019 a woman of action
Ethiopian scientist and activist Dr Bogalech Gebre, most commonly known as Boge was born at Kembata Tembaro southern Ethiopia in 1960 to a family of 14. Like the other girls found in Africa, Boge suffered from female genital mutilation when she was about twelve. She lost one of her elder sisters when giving birth. Since educating girls were seen as unnecessary in most parts of the country, Boge attend her school secretly and later attained her high school diploma at Addis Ababa. She went on to study Microbiology and Physiology in Israel and then in the United States, where she became Fulbright scholar at the University of Massachusetts Amherst, and later at the University of California, Los Angeles. The Independent Newspaper characterized her as “the woman who began the rebellion of Ethiopian women.” Bogalech once said, changing a woman’s status quo became my obsession, and striving to stop the horrendous practices of female genital mutilation (FGM), abduction, domestic violence. There were many untold stories putting girls’ lives from birth to adulthood at risk.
Along with her sister, Fikirte Gebre, Boge founded KMG Ethiopia, formerly called Kembatti Mentti Gezzima-Tope in 1997. Which called on Kembata women to stand together. Boge says, “Enabling women starts with showing them their self-worth.” KMG’s strategy is to link the day to day practical needs of the community with their long term strategy in areas of Ethiopia where illiteracy levels and FGM are high. The organization believes strongly in integrating economic empowerment and environmental rehabilitation, these programs 
provide tangible, visible improvements in the lives of the people it serves and succeeds in reducing cases of FGM from 100% of newborn girls to less than 3% in parts of Ethiopia. KMG works in 26 woredas of SNNP and Oromia on relating and improving lives of more than 2.8 million people directly and indirectly, 70 percent of these are women. Boge also is known for greening Durame, more than 10million plants have been grown to help the environment recover.
Boge was awarded the 2005 North-South Prize and in 2007 the Jonathan Mann Award for Global Health and Human Rights. She also won the King Baudouin Prize in 2014 in Belgium for confronting; “culturally entrenched taboo subjects.” As Boge says “In the long run, stronger women create stronger communities, stronger women create a stronger nation, and stronger women create a stronger Africa.”
Bogalech died on November 5.
