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The government of Ethiopia has revealed that it will launch a commodity exchange, which the government believes will help alleviate food shortages.
Ethiopia Commodity Exchange (ECEX), which is scheduled to begin trading in December, is the latest exchange to launch from a developing economy, following the success of Indian and Chinese exchanges.
Ethiopia has been besieged by food shortages, the latest being in 2002 but the government stressed that this was a result of market failure.
However the Ethiopian economy is dominated by the government and it remains to be seen whether such an economy can support a commodity exchange.
“At the highest level of economic motivation for their actions and most generous interpretation of them, they are trying to influence prices in a way that benefits mankind and they should be considered heroes for it.”
John Lothian on speculators in the commodity markets.