ZMX, GMAZ ink landmark deal

SAMANTHA MADE

The Zimbabwe Mercantile Exchange (ZMX) and the Grain Millers Association of Zimbabwe (GMAZ) have signed a groundbreaking Memorandum of Understanding (MoU) aimed at aligning structured trade systems with the national food value chain.

Speaking at the signing ceremony yesterday, ZMX CEO Collen Tapfumaneyi described the agreement as a strategic move to integrate grain offtake mechanisms into a market-driven ecosystem, ensuring consistent demand while unlocking pre-sale financing for producers.

“At its core, this collaboration enables grain offtake through forward contracts, helping to secure demand while unlocking finance for producers. It is designed to create a reliable, market-based system that works for both buyers and sellers—millers secure access to grain through binding forward commitments, while farmers and aggregators gain the ability to raise financing before actual sale,” Tapfumaneyi explained.

The partnership, he said, is tailored to address one of the most critical challenges in the grain value chain: moving large volumes efficiently while balancing supply needs with cash flow realities on both ends.

Under the model, maize and wheat will initially be delivered to ZMX-certified warehouses, where they will be converted into Warehouse Receipts (WRs)—a globally recognized financial instrument representing verified, traceable proof of commodity quantity and quality.

“Millers will sign forward contracts for commodities listed on ZMX. These contracts are executed on the exchange and digitally recorded. Each contract has clearly defined delivery windows, pricing, and settlement terms—and they’re backed by physical stock validated through the Warehouse Receipt system,” Tapfumaneyi said.

Farmers and commodity suppliers holding WRs will have two options: they can wait for millers to take delivery and receive payment upon maturity, or monetize the receipts early through ZMX’s financing options, including Warehouse Receipt Discounting and Pledging.

“One of the biggest constraints for farmers is delayed payment post-harvest. With this model, farmers don’t need to wait until millers are ready to take delivery. They can access working capital immediately,” he noted.

The arrangement also brings financial relief for millers, who typically face pressure to make large upfront payments to secure grain supply.

“This model eases that burden. Millers can enter into forward contracts without immediate cash outflow while still securing future stock. They take delivery in smaller, manageable tranches—reducing storage pressure and aligning purchases with production cycles,” Tapfumaneyi added.

He also emphasized the importance of ZMX’s grading and certification system, which ensures that the quality of commodities is assured at the point of delivery.

GMAZ chairman Tafadzwa Musarara hailed the agreement as a historic milestone that will fully operationalize Zimbabwe’s commodities exchange in line with global best practices.

“Today we make history by signing an enabling agreement that fully operationalizes our commodities exchange. ZMX, by committing to procure all the maize brought to it, conforms to international standards,” Musarara declared.

He said the partnership marks a “great departure” from past systems where the government, through the national fiscus, had to shoulder the burden of ensuring grain supply to millers.

“Our cooperation with the government over the past seven years has created a conducive environment and strengthened our trust. From 2019 to date, GMAZ and its contract farming ally FCCA have cumulatively supported over 800,000 hectares of maize and wheat production,” Musarara revealed.

He welcomed the bumper maize harvest announced by Cabinet for the 2024/25 cropping season, noting that active price discovery is now underway, pending the drying of moisture-heavy local maize due to recent late rains.

“We anticipate massive trade to begin in two weeks. We want to give our irrevocable commitment and assurances to all participating banks that we will buy and pay for all the maize they would have financed,” Musarara stated.

He added: “Most importantly, we want to assure consumers that from now until the next harvest in 2025, maize meal will be abundantly available. There is no need for panic buying.”

This ZMX-GMAZ pact is expected to usher in a new era of structured grain trade that benefits every stakeholder in the value chain—from farmer to financier to miller and ultimately the consumer.

With a digitized trading platform, secure warehouse systems, early access to financing, and guaranteed offtake mechanisms, the collaboration signals Zimbabwe’s long-overdue shift toward a structured commodity market with built-in transparency, traceability, and price discovery.

If successfully implemented, the model could reduce reliance on government interventions, increase production incentives for farmers, and stabilize prices and availability of maize meal—a staple for millions of Zimbabweans.

As Tapfumaneyi aptly concluded, “This is more than just a contract. It’s a system-wide transformation designed to make Zimbabwe’s grain economy resilient, reliable, and fair for all players involved.”