The Zimbabwe Mercantile Exchange (ZMX) has launched the Commodities Trading platform (commodities exchange) to offer transparency, efficient and fair pricing mechanism in the marketing of agricultural commodities.
The ZMX is a joint venture between Financial Securities Private Limited (Finsec), TSL Limited and CBZ Holdings supported by the government of Zimbabwe.
The commodities exchange will be based on an automated Warehouse Receipting System and Spot Market Trading Platform for convenience and efficiency in the marketing of agricultural commodities.
Prices are market based thus according to supply and demand.
Officially launching this morning, Finance and Economic Development Minister, Professor Mthuli Ncube said the exchange will be crucial in addressing the challenges facing the agriculture sector which includes unfair pricing of commodities which cut farmers returns and poor storage facilities leading to post harvest losses among others.
“The commodity exchange ensures an efficient, fair market price discovery system that gives better access to local and international commodity buyers and better margins for farmers that short-circuit current challenges,”
“The Warehouse Receipting system is key in addressing one of the challenges farmers face that of poor storage facilities resulting in post-harvest losses,” said Prof. Ncube.
Studies show that post-harvest losses encountered by Zimbabwean small holder farmers are as high as 30 percent of total harvest.
The Finance Minister said approved warehouses will be used for grading and facilitation of physical storage of commodities prior to their trading on the exchange.
“The commodity exchange will help small holder farmers to be integrated into the mainstream economy in pursuit of NDS 1 objectives of an empowered upper-middle-income society by 2030,” said deputy Minister for Lands, Agriculture, Fisheries, Water and Rural Resettlement, Douglas Karoro.
The development is expected to mitigate challenges in the sector which includes lack of access to pre-planting and post-harvesting finance, post-harvest losses, poor agriculture marketing infrastructure, inappropriate warehousing facilities, underdeveloped logistics for the movement of agro-products from farm to markets and poor price discovery system.
Commodities to be traded on the exchange include the country’s strategic grains such as maize and wheat, sorghum, rapoko, soya beans, sugar beans, ground nuts, round nuts, macadamia nuts, rice, oats, barley and coffee among others.
Many commodity exchanges were introduced in the 1990s in Asia and Latin America and have proven to be sustainable.
