Coffee traders complain over trade transaction at ECX

Ethiopian Commodity Exchange (ECX)
Ethiopian Commodity Exchange (ECX)

ECX director hints the problem is temporary

By Hayal Alemayehu, Reporter

Major coffee traders who supply the beans to the local market complain that they could not get the full amount of coffee they buy at the Ethiopian Commodity Exchange (ECX) warehouses while the VAT payment for the missing stock is not returned to them in time.
“When we buy, say, a 100 quintal of coffee, we end up getting 80 or 90 quintals,” said a coffee trader on condition of anonymity because the person is not entitled to give information to the press. “We do not only fail  to receive the full amount of the stock we buy but also suffer from the fact that we are not getting back the VAT payment for the missing stock in time, which will hurt our business.”

Owing to such challenges, scores coffee traders who supply the local market are entering the contraband market, according to some of traders at the ECX.

Due to warehouse moisture, the coffee stored at the warehouses will naturally face shrinkage or a loss, Dr. Eleni Z G.Medhin, the director of ECX, told The Reporter.

“We have been able to witness that there is a 0.11 percent shrinkage or loss from the coffee stock stored at the ECX warehouses from the last peak season. The committee members from the traders know this fact as well,” Dr. Eleni said. “This is our first year’s experience. We will come up with the best solution for this problem.”

There could be a delay associated with the reimbursement of VAT payment for the traders, the director said. She remarked that ECX is not mandated to pay back or return VAT payments.

“We collect VAT payment and withholding tax on behalf of the government, yet we are not mandated to reimburse VAT or withholding taxes,” she said. “That is rather the jurisdiction of the the Ethiopian Revenue and Customs Authority.”