Challenges of Commodity Exchange in Ethiopia: The Case of Ethiopian Commodity Exchange (ECX) with Reference of Coffee Market

Abstract

To plan a suitable organizational growth as well as for great contribution for the economy, ECX need to identify the basic problems. Hence, the purpose of this study is to examine the basic challenges of ECX on coffee: with the reference of yirgachiffe, sidama, harari and jimma coffee. Both quantitative and qualitative methods, using responses given by 168 trade members in ECX from different occupation (student, farmer, fulltime merchant and government employees), is employed in the analysis. To collect the necessary data the researcher used questionnaires and telephone interviews and also probability sampling technique especially, systematic random sampling was used. A descriptive method of data analysis was employed using Statistical Package for Social Scientists (SPSS) Version 16. The findings result from this study reveal that shortfall of agricultural product, physical infrastructure, macroeconomic instability, price fluctuation, lack of adequate warehouses that accommodate ECX participants request,. Higher penalty cost imposed on the participants for not withdrawing their commodity from the warehouses, poor quality of warehouse service insufficient time to store and transfer the commodity, inefficient and inadequate in store credit; discouraging the membership requirement of ECX, expensive membership seat fee and exposed for corruption were found to be amongst the fore front challenges to the success of ECX.