Fortune News | Aug 17,2025
The Ethiopian Commodities Exchange (ECX), once a flagship institution for transforming the country’s agricultural market, is undergoing a protracted institutional and operational decline, exposed by falling revenues, a shrinking customer base, and intensifying regulatory frictions.
The ECX’s struggles mirror broader structural dislocations within the commodity export sector, particularly the federal government’s heavy-handed intervention in price setting, most notably in the coffee trade.
Once the central hub for agricultural produce, the Exchange reported a 22pc drop in revenues over the past three years and confirmed a shrinking membership base. The ECX failed to collect more than 22pc of the nearly two billion Birr it was supposed to generate in the 2021-2023 fical years, and traded only 64pc of its planned market volume in 2023. Coffee, the main export crop, registered a 29pc decline in exports through the Exchange compared to the previous year.
The ECX, launched in 2008 under its founding CEO, Eleni Gebremedhin (PhD), now trades 28 commodities and has 510 members, but has also been steadily losing its dominant role.
At issue is the system by which coffee prices for export are set not by the market, but weekly by the Ethiopian Coffee & Tea Authority. According to the ECX executives, this has made its trading platform less attractive. Traders are opting for alternatives where they believe they can secure better prices, shrinking the Exchange's client base and reducing transaction volume.
Meseret Damtie, the federal auditor general, confirmed to members of Parliament last week these claims, saying the fixed pricing has “reduced ECX’s revenue and deprived it of its customers.”
Once the exclusive trading platform for export products, the ECX now operates as a spot market with a price floor system. While such systems are used internationally to prevent prices from falling too low, the Exchange’s executives argue that the authority's weekly price bands are discouraging buyers and sellers.
Mergia Bayissa, chief executive officer (CEO) of the ECX, told Parliament and federal audit officials that, in the past, traders were required to use the ECX, but they now have other options and are no longer compelled to trade through the Exchange.
Left: Meseret Damtie, the federal auditor general. Right: Mergia Bayissa, chief executive officer (CEO) of the ECX
“The decline in the volume of products received by the Exchange, the loss of customers, and the fall in revenue are directly linked to changes in the market,” he said.
According to Mergia, export coffee is now sold at prices set by the Authority, and that “these prices are not attractive to sellers, exporters, or suppliers.” He argued that if the Authority and the ECX did not set prices that could match market rates, the ECX would regain customers.
"The challenges facing it aren't the result of poor performance, but of a market environment that no longer operates as it once did,” he said. "The Exchange has been forced to see coffee at prices lower than the actual market value, which has pushed customers away."
The Auditor General echoed these concerns before federal legislators, pressing that letting the Authority regulate and set prices created a “conflict of interest and violates the law.” She urged Parliament to review the mandate of the Authority, if it was not meant to perform market activities.
“The issue should be addressed through reforms in the Ministry of Trade & Regional Integration,” Meseret said.
Officials from the Authority, however, have rejected the criticism. Its Director General, Adugna Debela (PhD), argued that ECX’s struggles are "the result of its own weaknesses and broader market changes." He attributed the Authority's price-setting pattern to international benchmarks and within a flexible range.
“Prices aren't rigidly fixed,” Adugna said, “the Authority sets prices within a range, and it is the responsibility of the Exchange to adjust selling prices in a way that attracts traders.”
Adugna asserted that the Trade Ministry does not have the authority to change the mandate of the Coffee & Tea Authority.
"It would be better for the Exchange to focus on improving its performance and work toward returning to profitability,” said Adugna.
The audit also flagged issues with the handling of coffee prepared for export but not shipped, including failing to meet export standards. According to ECX rules, this coffee should be returned to the Exchange platform for sale, but the audit found that it was not being returned. It also discovered that 20pc to 30pc of export-ready coffee ends up as by-products, which are supposed to be brought back to the Authority for trading, another rule that is not being enforced.
According to Kidist Sitotaw, deputy CEO of the ECX, the Exchange only acts as a marketplace, and that oversight falls to the Authority.
"The Authority oversees the entire export sector and should ensure that coffee prepared for export but not shipped is sent back to the market,” she said. "The Auditor General blamed the ECX for issues outside its mandate."
Kidist maintained that the Exchange reported to the Authority about traders buying coffee for export, but acknowledged that “some coffee that should be traded through the ECX platform is still not being brought to the market as required.”
The disputes have led to repeated debates over whether coffee prices should be set by the Authority or left to the market.
Abdulhakim Mulu (PhD), state minister for the Trade Ministry, told Parliament that discussions are underway to remove the delegation given by the Ministry to the Coffee & Tea Authority.
"Steps are being taken to remove the current arrangement and ensure that products are traded based on prevailing market prices,” he said.
The Exchange, which once handled all coffee export transactions, now plays a smaller role in the sector. The results of the federal audit confirmed that export coffee not shipped is often not returned to the ECX for resale, as required by regulations, and that byproducts are not being properly returned for trading. The ECX and the Authority continue to disagree over who is responsible for enforcement.
Ethiopia remains the world’s fifth-largest coffee producer and exporter. In the first five months of the current fiscal year, the sector generated 1.18 billion dollars in export revenue, accounting for about a third of the annual target. Officials from the coffee and tea sector attributed the increase to "improved quality," not higher volumes, and claimed earnings had doubled compared to three years ago. Ethiopia expects to export 600,000tns of coffee this year. Despite this growth, the audit found the ECX’s contribution to coffee exports continues to drop year by year.
Sani Tuke, an international trade consultant and founder of Optimum Logistics, believes the ECX’s problems are genuine, but that the institution has deep structural issues.
“Intermediaries are the main beneficiaries of trading on the platform, even though they add little or no value to the process,” he said.
Sani argued that the ECX should provide clear benefits to farmers, suppliers, and exporters, and warned that traders will not return simply because prices improve.
"Give priority to improving farmers’ income and ensure that they benefit fairly from the trading system,” he told Fortune.
Gizat Worku, general manager at the Ethiopian Coffee Association, argued that the ECX has lost customers not only because its prices are less attractive than those in the market. Traders are shifting to vertical integration and away from the ECX platform.
“Vertically integrated markets are simpler, and exporters can access better quality products there compared to the ECX,” he told Fortune. “The shift in the market is straightforward. Traders now find the alternative markets more convenient and rewarding.”
He echoed Sani's argument that adjusting prices to match the market is not enough to bring traders back, and that for the ECX to regain its customers, the Exchange should make trading easier, eliminate malpractices, and offer competitive prices meeting market expectations.
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