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Judith Phiri, Business Reporter
THE Financial Securities Exchange Limited (FINSEC) will soon launch the country’s first-ever agricultural Commodity Fund board that will ensure the commodities fund is utilised to counter widespread challenges faced by the agriculture sector players, mainly during marketing season.
Stratus Capital Partners (Private) Limited, an asset management firm in April launched the Stratus Commodities Fund as part of the firm’s intervention and contribution towards curbing post-harvest losses encountered by farmers perennially.
The target is to raise US$50 million will go a long way to fund post-harvest agriculture in Zimbabwe which is estimated to require about US$900 million, while it is anticipated that the fund will grow over time.
The Stratus Commodities Fund has already fulfilled the Securities Exchange Commission of Zimbabwe (SECZIM) requirements and will soon be listed on FINSEC.
In a post on Twitter, FINSEC said: “FINSEC is all set to launch the Commodity Fund Board. Be prepared for a groundbreaking moment as the country’s first-ever agricultural commodity fund gets listed on FINSEC.”
The listing and launch of the board, which was set to be done on Friday, has been postponed to a later date to be announced.
In a statement giving detail about the commodities fund, FINSEC said it was created as a means of funding post-harvest agriculture in Zimbabwe, particularly through the provision of liquidity on the Zimbabwe Mercantile Exchange (ZMX).
“This will enable the trading of agricultural produce to be done seamlessly through aggregation of small parcels from various farmers across the country and market making these parcels as bigger parcels to agro-processors and other users of agricultural produce as manufacturing inputs,” read part of the statement.
ZMX is an agricultural commodities trading platform with automated electronic warehousing and receipting capabilities, launched in 2021. It also conducts its weekly Agricultural Commodities Auction system, online every Wednesday with the aim of assisting farmers in getting market-determined prices.
FINSEC said the Stratus Commodities Fund will also provide a price discovery mechanism on the agricultural exchange, ZMX, which will see farmers getting fair pricing for the outputs and processors getting close to import parity prices for their inputs.
The exchange said: “The commodities fund will operate in three key markets in the economy namely in the capital markets, as a collective investment scheme, it provides an opportunity for pension funds and other institutional investors to participate in the agricultural sector by investing through the fund.”
FINSEC said in the primary commodity market, as a participant on the ZMX, the commodity exchange will be buying and selling agricultural commodities listed on the ZMX.
While, in the secondary financial markets, the commodities fund will be listed on the FINSEC as a mutual fund in the alternative investment space, where investors in the commodity fund can then buy and sell units in the fund through licensed dealers and other authorised financial securities traders.
At the launch of the commodities fund, Lands, Agriculture, Fisheries, Water and Rural Development Permanent Secretary John Basera said the move by Stratus Commodities Fund fell in line with the Government’s policy of transforming the agricultural sector by creating an enabling environment for private sector participation.
“National Development Strategy 1 (NDS) formulated by the second republic recognised and addressed the need to reform the financing and marketing of agricultural commodities as a stimulant to the economic development of our country.
“Across the world, commodity funds play a vital role in enhancing commodities markets efficiency. It is pleasing to note that our country has taken one bigger step towards international best practice by the establishment of this Commodity Fund,” said Dr Basera.
Online Reporter