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Business Reporter
The Zimbabwe Mercantile Exchange (ZMX) says self-financed farmers and private contractors may now trade their soyabeans, wheat, and barley through the ZMX exchange following the liberalisation of marketing and trading of the commodities by the Government.
Marketing and trading of the commodities were liberalised following the gazetting of Statutory Instruments 129 and 130 by the Government on July 21, 2023.
“ZMX is pleased to announce the addition of more commodities to its weekly auction held every Wednesday,” the exchange said in a statement.
The updated list of commodities tradable on the auction with effect from August 2, 2023, now consists of maize, soybeans, sugar beans, sunflower, white sorghum, red sorghum and wheat.
The Government also recently approved the ZMX to start trading maize, which together with soyabeans, barley, and wheat were excluded as they fell under controlled commodities, after liberalising the trading of the commodities.
ZMX said the latest development provided a boost for the growth of the exchange’s activities.
Collin Tapfumaneyi, the ZMX chief executive, said bringing a major commodity like maize to the exchange would push volumes as well as boost confidence in it.
This also enables the exchange to fully realise its mandate of facilitating the trade of the country’s agricultural commodities, allowing farmers to enjoy market determined price discovery.
One of the key objectives of the ZMX is to provide an open market for commodities, with willing buyers and willing sellers providing price discovery mechanisms.
The exchange also ensures a timely settlement of transactions on a willing buyer-willing seller basis, with both parties agreeing on the price.
During the first maize sale in June, a total of 93 tonnes worth US$24,050 were traded on the exchange and ZMX said the inaugural maize auction was a big step towards organised commodity market.
Last month, the ZMX warehouse receipt instruments were conferred liquid asset status by the Reserve Bank of Zimbabwe (RBZ), a move that can benefit farmers with greater financial flexibility and better price stability.
According to ZMX, this means that as a tradable and negotiable instrument, the Warehouse Receipt Instrument is now considered an asset that can be easily converted into cash.
A Warehouse Receipt is a legal document that provides proof of ownership of a commodity stored in a certified and approved warehouse, providing evidence of the quantity, grade, and quality of the stored commodity.
In Zimbabwe, it is recognised as a security in accordance with the Securities Act, and they are used worldwide for commodity trading and financing as well as collateral for loans.
The ZMX Warehouse Receipt System is now fully operational, and farmers, contractors, and buyers of agricultural commodities are already using the innovation to access safe and secure commodity storage as well as alternative, cost-effective financing from participating institutions.
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