ZMX completes pilot project
RYAN CHIGOCHE
Escrow Group is optimistic about the prospects of soya bean trading heading into the new year after completing trial trades of the commodity on the Zimbabwe Mercantile Exchange (ZMX) platform.
The trading of soya bean, which is one of the country strategic crops, was approved by government in August this year as a pilot project to pave way for other bigger cash crops such as maize and wheat.
Escrow Group general manager Garikayi Munema said the trial trades were done to ensure that all processes “end-to-end are seamless”.
“I am pleased to report that all the trades we did went through without any hiccups from the product deliveries into warehouses, the issuance of warehouse receipts though to the trading and settlement of the trades. This has set ZMX on a sure platform to trade soya bean in the coming season.
For this year it was more of aligning all the necessary processes since the approval came at the tail-end of the soya marketing season.”
Soya bean has become the fifth commodity to be listed for spot trading after white sorghum, red sorghum, millet and sugar beans.
ZMX operates an electronic warehouse receipt system (WRS) and a commodity trading platform for the trading and financing of agricultural commodities.
The WRS enables commodity holders like farmers to deposit their commodity with a designated warehouse in exchange for a receipt, a negotiable instrument that can be used as collateral for credit facilities or for spot trading.
Although pleased with the uptake of the facility to date Munema urged more farmers to take advantage of it with banks also urged to do more to support agriculture.
He said the warehouse receipt system has been widely accepted as a credible document of title and a form collateral.
“We therefore expect more farmers to start using the warehouse receipt for post-harvest financing while they wait to sell commodities and for more banks to extend credit facilities to support agriculture development underpinned by the Warehouse Receipt and Commodity Exchange Framework,” Munema said.
The ZMX was launched in August last year as a private sector initiative with government support.
In July this year, the government approved the acquisition of 20% shareholding in ZMX and committed US$360 000 as capital contribution.
This move transformed ZMX into a Private-Public Partnership, between the Government represented by Grain Marketing Board (20%) and FINSEC (22.5%), TSL (22.5%), and CBZ Bank (35%).
