By Wolasso L Kumo
With the population of over 80 million, Ethiopia is the second largest country in Africa following Nigeria with the total population of 140 million. However, with per capita income of less than US $200, Ethiopia is one of the least developed countries in the sub Saharan Africa. Agriculture is the main stay of the economy. Over 80% of the total population is employed in agriculture while the sector contributes about 50% of the Gross Domestic Product and over 80% of foreign exchange earnings.

Furthermore, agriculture is expected to provide food for the population and raw material and capital for the industrialization of the economy. The country´s development strategy is based on Agriculture Development Led Industrialization (ADLI) and is heavily dependent on the transformation of this sector. However, Ethiopia´s tradition bound agriculture failed not only to feed the growing population but also serve as an engine of industrialization and economic development. The sector faces various challenges. Among others, these include natural endowment, archaic technology and limited resources.

Since recently, the Ethiopian government tried to address one of these challenges by creating a national agricultural commodity exchange system. In line with the trend in many other African countries, Ethiopia has recently set up a national commodity exchange known as Ethiopian Commodity Exchange (ECX). A commodities exchange is a system where various commodities and derivates, and contracts based on them are traded. The contracts include spot prices, forwards, futures and options on futures. Commodities exchange play vital role in marketing agricultural outputs and improving the return for the primary producers.

The rest of the paper is organized as follows: section 2 describes the Ethiopian Commodity Exchange (ECX) while section 3 deals with the coffee exchange and the renaming of the Sidama coffee.

The Ethiopian Commodity Exchange (ECX)
The Ethiopian Commodity Exchange is established to trade in three major groups of agricultural commodities: Coffee, Grains and Pulses. It began its first live exchange of maize and white pea beans on April 24, 2008. Initially, ECX contracts involve spot trading or immediate delivery of physical commodities. However, ECX plans to introduce trading in futures contract in the near future. During the first phase of the operation, 25 agricultural commodities (mainly grain and pulse) were offered for the spot commodity contract.

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