THE ROLE OF ETHIOPIA COMMODITY EXCHANGE (ECX) IN STIMULATING AGRICULTURAL COMMODITIES EXPORT ( THE CASE OF EXPORT COFFEE )

Abstract

Commodity exchanges have crucial roles in the economic development of a nation at large and in the financial and non-financial developments of their market actorsIt is anticipated that agricultural commodity exchanges will assist commodity exporters as market participants.. The purpose of this paper was to examine the role of ECX in stimulating agricultural commodity exports with the case of export coffee. A structured questionnaire was prepared to measure ECX‟s role in this regard from its coffee exporting members‟ perspective. A quantitative research approach was implemented, and the hypotheses were also tested on a sample of 130 coffee exporting members and nonmember direct traders of ECX. Out of the 130 distributed questionnaires, valid response was collected from 118 respondents resulting with a 90.77% percent response rate. The data were analyzed using descriptive statistics, correlation & regression. The findings of descriptive statistics of the independent variables showed that facilitation of physical trade dimension scored the highest rating with a mean value of 3.83 while the storage and grading dimension scored the least mean value of 2.86. The correlation analysis result indicated that facilitation of physical trade had significant correlation with the export performance with 95% confidence interval & at 0.05 p-value, by scoring a Pearson Correlation Coefficient “Rvalue” of 0.665 and the remaining variables‟ result indicated that they were moderately correlated with export performance. The linear combination of the predictors‟ (independent variables) explained 54.6% of the variance in export performance. In addition to correlation analysis, further regression analysis was also conducted, and the result indicated that storage and grading, market information provision and market development dimensions of ECX‟s roles had a significant positive influence on export performance of coffee exporters. The results are useful to ECX in identifying focus areas of service that help to enhance the performance of coffee exporter members