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Edgar Vhera Agriculture Specialist Writer
EIGHTY-SIX percent of the maize delivered to the Zimbabwe Mercantile Exchange (ZMX) for trading has since been sold, as farmers continue to warm up to the system on the backdrop of a rise in the average price of the cereal to US$310 per tonne by Day 6.
Statistics availed by ZMX yesterday indicated that 327 tonnes of maize valued at US$101 370 were traded against last week’s 195, 06 tonnes worth US$56 567, 40.
This is a 68 percent rise in volumes and 79 percent increase in value.
The average price rose seven percent from US$290 per tonne on Day 5 to US$310 this week.
Buyers submitted maize bids for 1 037 tonnes at an average price of US$298, 14 per tonne in comparison to last week’s 1 159, 90 tonnes at an average price of US$273, 72 per tonne.
Maize buyers increased their bid price by nine percent to entice farmers to sell their produce.
Farmers were willing to sell 379, 98 tonnes of maize at an average price of US$311, 32 per tonne against last week’s 257, 18 tonnes at an average price of US$291, 75 per tonne.
At the end of the auction, 327 tonnes were sold at an average price of US$310 per tonne generating US$101 370 in earnings for farmers.
A total of 760 bids and offers, with an average price of US$294, 47 were unsuccessful compared to last week’s 1 027 bids and offers at an average price of US$271, 94, which marked a 26 percent decline.
For the third time running, buyers requested more than what farmers were willing to sell.
Farmers sold 86 percent of their maize, a 10-percent increase from last week’s 76.
The bid and offer prices are narrowing towards convergence, with average bid prices increasing from US$230 per tonne on day 2 to US$298 by Day 6, while the average offer price decreased from US$330 per tonne to US$311 over the same period.
The bid and offer spread has narrowed further down to US$13 currently from a high of US$100 on Day 2.
Food Crop Contractors Association (FCCA) chairperson Mr Graeme Murdoch said the ZMX was now gathering momentum though he was not sure whether farmers would increase deliveries.
“I believe that the auction is slowly gathering momentum. The introduction of a new system and new technology will always take time to be adopted.
“This week’s trading is indicative of firming prices in the market but I cannot say if that will translate into an increase in deliveries as there are a wide range of factors at play,” Mr Murdoch said.
Zimbabwe Commercial Farmers Union (ZCFU) president Dr Shadreck Makombe said high prices augured well for farmers, as profitability is enhanced though lack of publicity was the main obstacle to be addressed.
“Naturally, farmers would bargain for elevated prices, so with this high price those in the know are already talking of sending their produce to the warehouses. Unfortunately, it would appear there is not much publicity about the goings on at the ZMX,” Dr Makombe said.
Dr Makombe said there was need for more publicity to increase trading on the platform and enhance farmers’ welfare.
Meanwhile, Stockfeed Manufacturers Association of Zimbabwe (SMAZ) executive administrator Dr Reneth Mano said low stocks in ZMX warehouses were a result of warehouse receipts not being fully liquid at the moment.
“The warehouse receipt system is still not fully operational because there are no banks willing to discount the receipts or let farmers borrow against them,” he said.
Online Reporter