Government yesterday launched the commodity exchange, the Zimbabwe Mercantile Exchange (ZMX), aimed at providing convenience and efficiency in the marketing of agricultural commodities.
ZMX is a partnership between government and the private sector led by the Financial and Securities Exchange Limited, TSL Limited and CBZ Holdings and comes two decades after another commodity exchange stopped operating.
On the first day of trading, 77,862kgs of Grade A, white sorghum traded at $38/kg to rake in $2,958,756.00 and 2,058kgs of Grade A Red Sorghum traded at $38/kg to bring in $78,204. There were a total of 10 trades.
Finance and Economic Development Minister, Mthuli Ncube, who spoke at the launch of the ZMX said the platform will ensure enhanced profitability, access to markets, finance and credit for farmers.
He said ZMX will be based on a Warehouse Receipt System and is designed to support agricultural development in Zimbabwe.
According to Ncube, the Warehouse Receipt System is key in addressing one of the challenges farmers face, that of poor storage facilities resulting in post-harvest losses.
According to the Food and Agricultural Organisation estimates, post-harvest losses encountered by small scale farmers can be as high as 25%.
“The infrastructure that has been developed is suitable for both commodities classified as strategic grains such as maize, wheat and soya beans, as well as any other agricultural commodities including the likes of barley, coffee, groundnuts, macadamia nuts, millet, oats, pecan nuts, rapoko, rice, sorghum, sugar beans, tea, cow peas and round nuts,” Ncube said.
It is envisaged that the Exchange will facilitate trading of all agricultural commodities, thereby ensuring that Zimbabwe has transparent and equitable trading of its resources in line with best practices.
Over the past few months, the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement together with the Ministry of Finance worked on the supporting legislation culminating in the gazetting of Warehouse Receipt Regulations under Agricultural Marketing Authority (Zimbabwe Mercantile Exchange) Rules, 2021 to regulate registration of warehouses and the issuance, negotiation, trading and settlement of Warehouse Receipts through exchange infrastructure.
Approved warehouses will be used to facilitate the grading, certification and physical safekeeping of the commodities in their warehouses prior to and during trading through ZMX.
Awareness programmes on the Commodity Exchange and Warehouse Receipt will be rolled out across the country to various key stakeholders in the agricultural value chain, Ncube said.
In the 2021 National Budget, government allocated US$500 000 equivalent as its capital contribution towards the establishment of the Commodity Exchange.