The Ethiopian Commodity Exchange (ECX) installed mung beans as the sixth commodity to be traded on its floor on Wednesday, January 22, 2014.
The decision was made at the end of July, 2013, after the Board of the Ethiopian Commodity Exchange Authority (ECEA) gave its approval. The ECEA is the supervisory body of the ECX and has the final say on whether or not new commodities can enter the trading floor.
The ECX commenced trading operations in April 2008, with coffee, sesame, maize, wheat and pea beans.
There are four quality grades for mung beans and three delivery sites, located in – Addis Abeba; Kombolcha in South Wollo Zone of the Amhara Region (376km from Addis Abeba) and Assosa, the capital of the Benishangul Gumuz Region (657 km from Addis Abeba).
The export of the mung beans has increased over the past three years. This is one of the major reasons the Board approved the decision, according to an official at the ECEA.
Studies show that 150,000 to 200,000qt of mung beans – known in Amharic as masho – grow mostly in the lowland areas of the Amhara Region. They are especially common in Debre Sina, North Shoa Zone, as well as in Qallu, in the South Wollo Zone. They are currently being cultivated in the Oromia and Benishangul Gumuz regions.
Its market value has increased since 2010/11, with farmers increasingly interested in growing it, says the official from the ECEA. Exporters, especially from Dessie, the capital of the South Wollo Zone(400km from Addis Abeba), started actively exporting mung beans. This led to a price increase and inspired many farmers to get involved in mung bean production.
The price of a quintal has gone up from 1,560 Br, in 2010/11, to a range of 2,500 – 3,000 Br now.
The Amhara Region’s Administration, as well as various NGOs, has been advocating the entrance of mung beans on to the trading floor, in order to help farmers benefit further from this boom, according to the official. The boom is also something the ECX hopes to benefit from.
Ethiopia exported 174,000qt of green mung beans in the concluded year of 2012/13 and there is high demand in India, Indonesia, Belgium and the UAE, according to data obtained from the Ministry of Trade (MoT).
“The exchange has made the best decision in adding green mung beans, since it’s a commercial crop,” Samuel Mochoma , the corporate communications manager of the ECX, told Fortune. “It has a reasonable cost of production and is produced within a short period of 75 to 90 days.”
Green mung is less used domestically, but is a common ingredient in Chinese and Indian cuisines. It is also used to make sweets and ice cream. It is attributed with having high nutritional value, including protein content, and helps reduce cholesterol and diabetes.
Mung beans have, however, entered the ECX’s trading floor as an optional commodity. This will stay only temporarily, however, with the ECX planning to trade it as a mandatory commodity. The interval between the entrance of mung beans as an optional commodity and its progression to a mandatory commodity is designed to be used as a promotional period, according to Samuel.
“Mung bean has a promising potential for growth and changing the livelihood of the producers in the long run,” says Samuel.
Procedurally, before a commodity enters on to the trading floor, the product development team at the ECX collects samples from production areas and Mesalemia -where Addis Abeba’s largest wholesale grain market is located. A technical expert panel, comprising of individuals from the ECX, the Ministry of Agriculture (MOA) and the Quality & Standards Agency (QSA), will then study these. They will give advice on what quality and grading should be applied to the commodity.
Input is also gathered from traders, exporters and food processors in an industry consultation to assess the grading and quality applied. A trading contract results from these two discussions, which are then presented to the board of the ECX and eventually to the board of the ECEA for final approval.
When the decision to install mung beans to the ECX trading floor was made, the Board of the ECEA, consisting of six members, was convening for the first time under new chairman, Tefera Derebew, the minister of Agriculture. He has been appointed in place of Melaku Fenta, the former director general of the Ethiopian Revenues & Customs Authority (ERCA), who is now in prison on charges of corruption related to his stay at the ERCA.