Critical Assessment Of Ethiopian Commodity Exchange (ecx)

The commodity exchange market is very important because it brings together producersrnand consumers. However, the currently markets except for coffee have been thin withrnpoor liquidity and have not grown to any significant level.rnThis has a direct impact on the competitiveness, efficiency and futurity of the exchange.rnThus critical assessment of the exchanges practices and forwarding better way outs isrnnecessary.rnThe Ethiopian Commodity Exchange vision is to become an Exchange of choice in thernworld. And for competitive advantage in the international level and to provide efficientrnservices tolls like derivatives are essential.rnLack of derivatives, warehouse receipts based settlement; adequate risk managing toolsrnand mainly lack of liquidity are the major impediments of exchanges efficiency.rnIn this work, Ethiopia Commodity Exchange's trading practices, settlement issues, riskrnmanagement techniques, liquidity practices are critically analyzed. Relevant country widerninformation was explored. In addition, experiences of other commodity exchanges wererninvestigated. Finally, proposed way outs are forwarded.rnThe proposed way outs include introduction of automated trading system, ware housernreceipt based settlements, commodity derivatives specifically futures, certifiedrnwarehouses, and effective risk management tools

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