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Edgar Vhera
Agriculture Specialist Writer
FARMERS are delighted with Zimbabwe Mercantile Exchange (ZMX) weekly agricultural commodities auction which started on a good note with 93 tonnes of maize worth US$24 050 going under the hammer.
In a twitter post announcing commodities auction results for June 21 2023 trade, ZMX said the first maize auction was a big step towards organised markets.
This is surely going to have a positive impact on price discovery and market efficiency, said the post.
The auction results show that buyers submitted maize bids for 342 tonnes at an average price of US$259, 97 per kilogramme worth US$88 910.
Sellers were willing to sell 2 093 tonnes of maize at an average price of US$331, 68 per kg valued at US$694 050.
At the end of the auction, 93 tonnes were sold at an average price of US$260 per kg to generate US$24 050 in earnings.
A total of 2 250 bids and offers with an average price of US$326, 68 were unsuccessful.
ZMX chief executive Mr Collen Tapfumaneyi said they were encouraged with results of the inaugural trade and looking forward to many players joining trade in coming auctions.
“We are pleased by the level of participation by major players in agricultural sector in yesterday’s inaugural auction. The bid, offer and traded volumes registered yesterday were very encouraging.
“This gives us confidence that as participants become more familiar with the ZMX auction model, we can anticipate higher trading volumes and a more liquid market going forward,” said Mr Tapfumaneyi.
Mr Tapfumaneyi said as more buyers and sellers become aware of the auction and its benefits, they expect to see greater participation in the market.
We are now focusing on raising awareness and encouraging more participation which in turn leads to better price discovery, a more liquid market and faster payment to farmers, he added.
Stockfeed Manufacturers Association of Zimbabwe executive administrator, Dr Reneth Mano said this was a really fantastic and promising start.
“The fact that 93 tonnes exchanged hands at US$260 is very encouraging. Generally, stockfeed and milling industry buy about 65 000 tonnes per month.
“We expect more buyers to show up at the next auction. As long as the auction trades between 40 000 to 100 000 tonnes per month that would be great,” said Dr Mano.
Zimbabwe Commercial Farmers Union president, Dr Shadreck Makombe said this was the best move for the country.
“This is a great move in the right direction and was long overdue. It gives farmers and buyers flexibility in their choice of when to sell or buy their grain,” said Dr Makombe.
The auction is in accordance with the ZMX Trading Rules gazetted in Statutory Instrument (SI) 184 of 2021 and started with maize and eventually will include all other commodities listed on the exchange.
With the auction, buy and sell orders are posted continuously but matched at the end of the auction with one clearing price. The mechanics of the auction are designed to cater for as many buy and sell orders as possible, allowing buyers and sellers with similar needs to meet in the market at once.
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