Ethiopia begins electronic trade for coffee

ADDIS ABABA (Reuters) - Africa's largest coffee producer Ethiopia traded the bean through a new electronic system at its commodity exchange for the first time on Tuesday.

"This should introduce a new era of more reliable trade and increased export competitiveness for the Ethiopian coffee industry," Eleni Gebremedhin, director of the Ethiopian Commodity Exchange (ECX), told Reuters.

In two half-hour trading sessions, 116 tons of coffee changed hands. To participate in the electronic trade, coffee sellers are required to produce warehouse receipts and buyers must show a pre-trade deposit in banks.

The government says trading coffee through the exchange will help small farmers get a better price for their beans and will also improve the quality of exported coffee.

"The reasons why Ethiopia's coffee has been discounted in the past, such as inefficient delivery and unreliable quality, are over time going to be credibly addressed through this exchange," said Eleni.

"It won't happen overnight but today is an excellent start."

The Ethiopian Commodity Exchange opened in April and already trades agricultural commodities such as maize, wheat, corn and sesame.

Ethiopia has won trademark rights for its specialty Sidamo, Harar and Yirgacheffe coffees and has signed agreement with 70 global companies to promote its coffee brands.

Ethiopia prides itself as the birthplace of coffee beans. Last season it exported 170,888 tons of the crop and earned $525.2 million -- 60 percent of its foreign exchange earnings.

Fifteen million smallholder farmers grow the beans.

(Reporting by Barry Malone)