Transaction of pulses, a food group comprising lentils, peas, and beans – the primary ingredients of popular traditional Ethiopian dishes such as misir, shiro, and almost everything else in a vegetarian dish called beyaynetu, have been regulated to pass through the Ethiopian Commodity Exchange (ECX).
The previous minimally scoped regulations of the Ministry of Trade, which made ECX transactions mandatory for all trading of coffee, sesame, and white pea beans, now includes pulses. The group contains some commodities that are already exported, and some that are not.
Farmers’ produce is collected through cooperatives and sold to the Ethiopian Agricultural Commodities Warehousing Service Enterprise. This is the entity that took over the tasks of warehousing and measuring quality from ECX.
The new regulation will have pulses go through the same value chain.
Depending on the quality, the commodity will be designated to either the local or international market.
For the past eight years, coffee has been legislated to be traded solely through the Exchange. The coffee sold at every corner shop has passed through this chain. Yet, it was deemed unworthy of export. The first seven months of the current fiscal year have witnessed over a 100,000tn of coffee exported, and 346 million dollars gained.
In the same time, the country exported over two million quintals of pulses worth 132 million dollars. Red and white kidney beans contributed significantly to the revenue earned.
A little over 280 million quintals of pulses produced in 2014/15; only 3.5pc of that was produced by commercial farms.
Cognizant of this fact, the Council of Minsters has approved a new all-inclusive regulation called the Pulses Transaction Council of Ministers Regulations was enacted this month. The regulation covers all pulses with immediate effect. However, as of now, it will be applied only to mung beans and red kidney beans.
This is because mung beans (masho) and red kidney beans (Qey boloqe) are not consumed in Ethiopia, and are produced for export purposes, with Germany and Sweden being overseas market destinations, Mulugeta Mohammed, the Ministry’s pulses and cereals director said.
Mung beans have been voluntarily traded through the Exchange since 2012, and kidney beans worth 112 million dollars have been exported last year. They are harvested in Amhara State mainly in North Shoa’s lowest point in areas stretching from Shoarobit to Atage and sporadically in the Adama area of Oromia State while red kidney beans grow extensively in Beshangul Gumuz.
“For mung beans and red kidney beans, we have been offering training for suppliers, producers and exporters to make them adhere to the regulation,” Corporate Communication Senior Manager at the Exchange, Tewodros Assefa said.
However, he added that at regional level they should transact at primary market centers.
The transacting capacity of the ECX and the quantity of the commodity consumed, are factors considered in making the decision about whether it should be included on the export list and made to abide by the regulation.
It reads, any supplier, wholesaler, retailer, exporter or processor who conducts pulses transaction outside the primary transaction centers or the Ethiopia Commodity Exchange shall, in addition to confiscation of his pulses, be punishable with a fine of 10,000 Br.
Storing pulses outside of authorized warehouses, processing outside authorized processing industries and transporting without wholesale licenses are in breach of the regulation. Providing cover for third parties that have no license is also deemed illegal and subject to punishment involving confiscation of product, license revocation and fines.
Exporters find the new regulation acceptable.
“The new regulation squeezes out the influence of brokers,” said Anmew Alemu owner of Anmew Alemu Import Export.
As the transaction carried out at ECX and at primary market centers where grades for quality are set and quality products are served, exporters will be prevented from possible deficit. That is how global competitiveness can be assured, he said.
Anmew has been exporting green mung beans and red kidney beans supplied by persons who are licensed to supply sesame.
“I buy one quintal of mung beans at 1,220 dollars this year, 300 dollars more than I did last year,” he said.
“The regulation is a relief for the business community as it tackles illegal market players,” said Haile Berhe, president of the Ethiopian Association of Pulses, Oilseeds, & Spices Processors & Exporters Association (EPOSPEA).
He believes it will enable the business community in getting quality products, thereby, improving global competitiveness. The producer-supplier and exporter chain will be undisturbed by this regulation.
Using the electronic trading system ECX handles 100,000 transaction contracts per hour. This is 5,000 times more than it used to with the ‘open-out-cry’ system. The system hit the billion-dollar mark two weeks ago.
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