1. The Role of ECX in the Ethiopian Coffee Industry By Anteneh Assefa

2. TOPICS WHAT ECX BRINGS TO THE MARKET; ECX’S VALUE ADDITION TO THE MARKET; THE GTP; EXISTING INITIATIVES; NEW INITIATIVES; CONCLUSIONS.

3. I. What does ECX bring to the Market? Core Value Propositions Order Integrity Transparency Efficiency

4. How does ECX Bring Order? Through an organized trading platform; Through standardized contracts and standardized products; Through a system of Membership based participation; Through formal rules and procedures; Through monitoring and enforcement of compliance to rules; Through managing risks to the market;

5. Integrity zero default market Integrity of Product Integrity of Transaction Integrity of Actors

6. How does ECX bring integrity? Through industry accepted grading and certification of the quality and quantity of products traded; Through warehousing of commodities traded(global std. inv. mgt.); Through enforcing fair competition and ethical business conduct; Through clearing all payments between buyers to sellers;

7. How does ECX bring transparency? Through rapid and reliable dissemination of market information to all actors- producers, processors…local, international; Through a system of industry-accepted product grades and standards; Through enforcing disclosure and audit reporting requirements for its Members;

8. How does ECX bring efficiency? Through the use of IT to promote an End- to-End system- from warehousing to trading to clearing and settlement of payments to delivery of commodity; Through a centralized trading platform offering low-cost service to all users;

9. II. ECX’s value addition to the Ethiopian coffee sector Secure inventory management in production area; Guaranteed warehouse receipts system; Reduced mixing of coffee origins during the marketing process; Quality certification that preserves the origin of the coffee and establishes a finer distinction between coffee qualities; Trading system that ensures competition and transparency;

10. ECX’s value addition to the Ethiopian coffee sector (Cont’d) Guaranteed/quick clearing and settlement; Aggressive market data dissemination- market actors benefiting from of both national and international prices; Through improved consistency of qualities enhanced competitiveness of Ethiopia in the world coffee market.

11. Motivation for improved production; Increased producers’ share in the value of the beans-35% to 65%; Motivation of market players to come to the formal channel; ECX’s value addition to the Ethiopian coffee sector (Cont’d)

12. Looking Ahead -Strengthening Existing Initiatives -Creating New Initiatives

13. III. The GTP The G.T.P. lays emphasis on the development of sustainable agriculture in Ethiopia, with ambitious targets Expansion of production Conserving natural resources Moving farmers into market-oriented production

14. GTP Forecasts For Coffee Production and Exports Base yearYear 1Year 2Year 3Year 4Year 5 2009/102010/112011/122012/132013/142014/15 Coffee production341,000405,790482,890579,468695,362831,000 ( in tons) Coffee exports( in tons)172,210221,115283,907364,531468,052600,970 Coffee export earnings ( mil in USD) 528,000692,000906,0001,187,0001,555,0002,037,000 Growth Rate (%) Coffee production -19 20 Coffee exports -28 Coffee export earnings ( in USD) -31 Source: GTP main document and Policy matrix

15. IV. Existing Initiatives Rewarding Quality ECX has created a Q contract which rewards quality and incentivizes farmers and processors to produce quality coffee. To close the gap b/n increasing dd for specialty coffee Direct Specialty Trade(DST) Linking producers with international buyers; ECX provides warehousing, quality certification and trading venue; International buyers have the option to purchase certified and traceable coffee directly from producers; Win, win, win solution to the producers, buyers, and the market;

16. V. New Initiatives The Sustainable Coffee Working Group; Starbucks/ECX Traceability Program

17. New Initiatives ECX is working with Sustainable Coffee Working Group in collaboration with IDH Purpose of SCWG-Identifying ways that sustainable coffee could be brought to market through ECX, and the existing marketing chain, given the volumes needed; The SCWG has been working during the last six months and will shortly be producing a strategy paper;

18. Starbucks and ECX Traceability Program DateProgra m Description 2010Starbuc ks and ECX Traceability Initiative  Signed an MOU to begin a traceability initiative; 2011- 2012 ECX Pilot  Integration of GeoCertify traceability services into the ECX  GeoCertify scaled up to track all grades of coffee from the entire Sidama A and Yirgacheffe  Over 3 million kgs were tagged through this program  The program was proven scalable 2012- 2013 Market Adaptation  Next phase Starbucks and ECX to extend traceability to the market-to the consumer globally  Starbucks and ECX to scale the program to capture more classifications.

19. VI. Conclusions ECX aims to strengthen and add value to the Ethiopian Coffee Sector; ECX as a dynamic and forward looking institution, is ready and willing to adopt to current global practices and initiatives-traceability, specialty issues; ECX recognizes that sustainability provides an opportunity to Ethiopia in providing the platform to major roasters and coffee traders in sustainable sourcing and corporate responsibility.

20. THANK YOU