Challenges And Prospects Of Commodity Exchange In Ethiopia. In The Case Of Ethiopian Commodity Exchange (ecx)

The general objective of this study was to assess the current commodity exchange practices inrnEthiopia, in the case of Ethiopian commodity exchange. It also aimed to examine the existingrnprospects to commodity exchange and to explore the challenges faced by the Ethiopianrncommodity exchange. In order to meet these objectives, the study used qualitative researchrnmethods to explore the current commodity exchange practices in the study area. Consequently,rnstratified random sampling was used to select the informants of the study. The findings showedrnthat the development of commodity exchanges in the country is impeded by the relatively smallrnsize of domestic commodity markets, weak physical and communication infrastructure, a lack ofrnlegal and regulatory environments, and the likelihood of policy interventions, particularly in thernmarket for staple cereals. Meanwhile, the demand for a domestic commodity exchange for exportrncrops may be limited due to the availability of well-established exchanges. The paper alsornhighlights major prospects and future outlooks an exchange in the specific context of Ethiopia.rnFinally, The paper also recommend: the goals of risk management and reduced transaction costsrnin the Ethiopian commodity exchange might be achieved more effectively through investmentsrnin transportation, warehousing, information services, or other financial institutions which couldrnsupport future establishment of a commodities exchange.

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