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The EAX’s main objective is to offer agricultural commodities trade services in Rwanda and
the East Africa community. According to the EAX website, its mission is to strengthen East
Africa regional integration by creating a common and coherent financial sector in agriculture,
mining, and energy. The EAX’s offers six main services among them, collateral management,
trade settlement, risk management, electronic warehouse receipt, commodity trading,
Warehousing services. The company aims and ensuring guaranteed quantity and quality
farmer’s gains, trade reliability, and risk mitigation.
The main stakeholders are; the owners, Rwanda, East Africa community countries, farmers,
traders, brokers, millers, and commercial banks.
The company is owned by Nicolas Bergurruen of Berggruen holdings ltd, Tony Elumelu of
Heirs holdings ltd, Jendayi Frazer of 50 ventures, and Rwanda through Nagli Holdings Ltd.
Both Berggruen holdings ltd, and Jendayi Frazer of 50 ventures are from USA while Tony
Elumelu of Heirs holdings ltd, is from Nigeria.
The EAX is headquartered in the capital city of Rwanda Kigali, but has been registered in all
east Africa community countries which form its main geographical coverage. However, the
company offers trade facilitation both locally and globally.
The organization has 215 registered members. These members include maize, beans, soya,
wheat, sorghum and paddy rice producers, traders, brokers, millers and commercial banks
across the region.
9. What are the main requirements for participating in the EAX trade?
In order to trade at the EAX trade, one must be registered as a member with the EAX. To do
so, one needs to fill the application forms and pay an application fee of $100. After the
application is accepted, one is required to pay the membership fee based on their application
category. All new members must be approved by the capital markets authority before trading.
EAX operates a fully automated trading platform where participants can buy and sell
products from the convenience of their location of choice, or trade from trading terminals
provided by the Exchange. The trading platform is powered by NASDAQ OMX and can
facilitate auctions, reverse auctions, spot trading, forwards trading, and futures trading
The most traded commodities at the EAX are maize, beans, soya, wheat, sorghum and paddy
rice
12. What are the similarities of the EAX to Mombasa Tea Auction?
Like the Mombasa tea auction, the EAX is aimed at improving the trading opportunity and
platform the stakeholder farmers.
The prices for commodities traded at EAX are determined by the demand and supply forces.
This are affected by the current and historical prices of the commodities. The commodities
traded feature at the NASDAQ which makes price determination easier.
EATTA could adopt the use of fully automated systems like the electronic warehousing.
EATTA could also adopt the money market opportunities derived from trading with
NASDAQ.
20 Things you need to Know about the The Automated Tea Auction in India
1. How many is exist in India and which one is the Largest? And are all the Auction Houses
using Automated Tea Auction System(s)?
Calcutta Tea Auction is one of seven auction centers in India and it is the largest. All the
automated tea auction systems are used by 5 companies in India.
2. Who owns the Automated Tea Auction System?
It is owned by the tea board of India which has been delegated the opportunity of organising the
tea industry by the ministry of commerce and industry. The governing law oversees the tea
auction in India.
3. What is the role of government in the automation of Automated Tea Auction System?
The government oversees all the tea auctioning in India through the use of the tea marketing
control order 2017 and the tea warehousing licensing order.
4. How long did it take to have the Automated Tea Auction System fully operational? Will it
take the same amount of time to implement in KE
The e-auction was launched in the years 2008 and 2009. The base product was delivered on
13th September 2008. During the training session held around 6th November 2008 the users
made recommendations on additional functionalities to be incorporated into the system. It can
make the same amount of time to complete the operational activities of the project in Kenya.
5. How is the maintenance cost for running the Automated Tea Auction System covered?
It can be covered through developing a simple e-auction system that has limited capabilities but
is easier to manage.
Internet connectivity is important to consider in the automation process h carrying out the e-
auctioning process
The automation experience has to be flexible which will make it possible to accommodate
higher bids.
9. How does price determination happen on the Automated Tea Auction System?
Through the reserve price set by the Broker. The Broker can modify the reserve price
upwards or downwards before the lot becomes active. When the lot is active the Broker can
only adjust the reserve price downwards. The Buyer can also adjust their bids up or down
before the lot is active. After this they can only adjust a bid already placed up.
11. How do they deal with out-lots in the Automated Tea Auction System?
Currently the division of lots is determined by time priority meaning the person who responds to
a request for division first is given first priority the same applies with the out-lots
12. What are some of the main changes that took when Automated Tea Auction System was
fully implemented compared to the previous manual operations?
Faster trading that allows movement of higher volumes of tea
Accuracy of data
A Buyer or Broker need not have to go to the auction room
The modules such as my catalogue and bid book make planning the buying activity is
made much easier
Anonymous bidding involves bidding without the presence of the people involved in the
bids. In India, it is done to increase transparency in the system in a mechanism where the
Buyers bidding for the tea needed to be anonymous.
It is the selection of different types of teas with similar attributes with no order but
sequentially from the various sessions.
15. How many lots are sold per minute in the Automated Tea Auction System?
Initially the system was configured to allow bidding to be on two lots per minute as a start. This
was to enable the buyers acclimatize to the new way of buying tea. With time this was increased
to three and four and now the current five lots per minute
16. What can EATTA learn from India Automation Journey?
EATTA should remain open minded on whether the automation will result to price
changes compared to the manual trade as the primary objective is overall efficiency of the
trade.
The decision to implement random and anonymous bidding must be adequately debated
and a consensus builds on the final approach. However, EATTA’s system should support
these capabilities as might be handing if there is a policy change
EATTA needs to develop long-term sustainability measures for the proposed automation
since this is inevitable especially for the period after TMEA support.
Unlike India, EATTA needs to take the value of data seriously and utilize the data that
will be generated by the system by undertaking Business Intelligence (from the data)
exercises to improve the trade.
17. When EATTA team visited India, who did they meet?
In McLeod Russel India Ltd they met Azam Monem, Vijay Jaganath, Aziz Shadab.
In Tea Board of India they met Rajanigandha S. Naskar
In Tata Global Beverages they met Rajdeep Sikand and Utpal Gohain
In J Thomas PvT Ltd they met Krishan Katyal and Ravi Suchanti
In Asian Tea Group they met Vicky Tambi
In Calcutta Tea Trade Association they met Kalyana Sundaram
18. What are the main benefits that have been observed since full implementation of the
System? XXX member specific benefits then the farmer
Faster trading that allows movement of higher volumes of tea
Accuracy of data
A Buyer or Broker need not have to go to the auction room
The modules such as my catalogue and bid book make planning the buying activity is
made much easier
The farmers have found market to their products easily
19. How has the automation impacted volumes and prices of traded tea through the auction?
The increase in price of the better quality teas has been balanced out by the decline in the
medium and lower quality teas
The origin of the push for automation was the suppressed prices resulting from oversupply of
tea in the auction
20. Has there been a change (increase/decrease) in the number of participants in the Auction
since Automation as a result of the Electronic System?
Due to the sensitization programs and the increase in the tea growers, the number of participants
has been increasing in the electronic system. An observation made is that teas that fetch better
prices have seen an increase while teas that are of medium to lower quality have declined and
that increases the number of participants included.