The Sunday News
Judith Phiri, Business Reporter
THE Zimbabwe Mercantile Exchange (ZMX) has launched the commodities trading platform to offer transparency, efficient and fair pricing mechanism in the marketing of agricultural commodities.
The ZMX initiative is a partnership between Government and the private sector led by Financial and Securities Exchange Limited (FINSEC), TSL Limited and CBZ Holdings with FINSEC undertaking the technical implementation of setting up the exchange.
Development partners such as the World Bank Group have thrown their weight behind the initiative, spearheaded the Warehouse Receipt System (WRS) through providing technical expertise.
The commodities exchange will be based on an automated WRS and Spot Marketing Trading Platform for convenience and efficiency in the marketing of agricultural commodities.
Officially launching commodities trading platform, Minister of Finance and Economic Development, 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,” said Minister Prof Ncube.
He said the WRS is key in addressing one of the challenges farmers face that of poor storage facilities resulting in post-harvest losses.
Studies show that post-harvest losses encountered by Zimbabwean smallholder farmers are as high as 30 percent of total harvest.
Minister Prof Ncube said approved warehouses will be used for grading and facilitation of physical storage commodities prior to their trading on the exchange.
He said: “This initiative has full support of the Government, as agriculture is a key economic sector contributing more than 17 percent of GDP and providing employment and income for more than 65 percent of the population.
“As you will recall, Government through the 2021 National Budget allocated US$500,000 equivalent as its capital contribution towards the establishment of the Commodity Exchange.”
Deputy Minister of Lands, Agriculture, Fisheries and Rural Resettlement, Douglas Karoro said the commodity exchange will help smallholder farmers to be integrated into the mainstream economy.
“The commodity exchange will help smallholder farmers to be integrated into the mainstream economy in pursuit of the National Development Strategy 1 (NDS 1) objectives of an empowered upper middle economy by 2030,” he said.
He said 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, wheat, sorghum, rapoko, soya beans, groundnuts, macadamia nuts, rice, oats, barely and coffee among others.
The Food and Agricultural Organisation (FAO) also came in handy for ZMX with further assistance in research and policy formulation together with Agricultural Policy Research Institute (IAPRI) for technical assistance centered on how smallholder farmers can participate in the mainstream economy.
