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Agriculture Specialist Writer
WITH many recent agricultural marketing seasons having been littered with price wars, the Zimbabwe Mercantile Exchange (ZMX) has undertaken to encourage farmers, buyers and financiers to switch to the ZMX trading platform for a productive 2023/24 marketing season.
ZMX head public relations and communications Mrs Sandra Kawenda revealed that the platform intended to generate greater activity from market prospects and to play a significant role in the trading of commodities in the coming season.
“ZMX has successfully conducted awareness-raising programmes among farmers, buyers and financiers around the nation. The platform is not limited to the initial four products of soyabean, millet, wheat, sorghum but has expanded its horizon to include horticultural and livestock products.
“The trading platform will increase access to financial services and credible trading facilities for farmers,” said Mrs Kawenda.
She added that ZMX had a regulated, structured, rule-based market that brings together buyers, sellers and financiers to trade commodities on a transparent and convenient platform.
“The platform enables transparent price discovery for all the listed goods, and merchants are assured of getting the best deal at any given moment.
“Direct orders from buyers and sellers are posted on the platform, where the computerised trading system automatically matches the orders,” continued Mrs Kawenda.
The ZMX platform is based on delivery versus payment and is extremely secure. This means that settlement is guaranteed since transfer of commodities from seller to buyer only happens after payment has been made prior to or simultaneously with transfer of commodity ownership. Sellers are assured of getting funds deposited in their bank or mobile wallet accounts within a maximum of three working days from the time the trades match on ZMX. The trading cycle is based on the traditional T+3 cycle.
When farmers deliver their crop and livestock products to warehouses, they are given warehouse receipts, which form the basis of trading on ZMX. The warehouse receipts are issued by approved warehouse operators and serve as proof of title, specifying the commodity type, quantity and quality. Warehouse receipts are recognised as securities under the Securities Act and are negotiable, transferable and can be used as collateral for credit facilities from participating financial institutions.
ZMX has a network of accredited warehouses spread out over Zimbabwe that serve as distribution hubs for the platform to meet the demand for the many commodities traded and funded on the exchange. Before receiving ZMX approval for the handling and storage of commodities, each of these warehouses has to comply with rigorous requirements.
Mrs Kawenda further said: “In order to provide our clients with peace of mind, certification requirements include stock management, risk management, auditing, insurance of the commodities housed, routine fumigation, and assured security of the warehouse. Currently, buyers and sellers can sell wheat, millet, soya beans, red sorghum, white sorghum and sugar beans and the platform supports both local and United States dollar transactions.”
ZMX further encouraged contracted farmers to honour their contractual arrangements in the 2023 marketing season and called on the self-financed to consider trading maize, sunflower, and soyabeans via its platform for the upcoming marketing season.
“Our system efficiencies will help smallholder farmers to form groups and come together to deliver their produce, receive warehouse receipts, access funding from banks through warehouse receipt financing and eventually trade via the platform. We have lined up buyers for the commodities and we are available to discuss individual requirements to facilitate smooth and efficient trades,” remarked Mrs Kawenda.
Farmers and commodity buyers can access both real-time and post-market data through the digital platforms (USSD, Mobile Apps, and Web Portal), daily market reports distributed through email, and ZMX website articles. In order to reduce market asymmetry, this tool has been made available to all users who have registered on the platform, even if they do not trade on the platform.
Online Reporter