Online Reporter
Edgar Vhera
Specialist Writer – Agribusiness
THE Zimbabwe Mercantile Exchange has introduced a grain input swap programme for wheat farmers this marketing season.
This comes as wheat harvesting has started for the early planted crop.
Harvesting is expected to intensify from next week.
The ZMX said the input swap programme allows farmers to get an instant access to inputs, equivalent to the value of their stored product, for the upcoming summer season, even though the wheat would not have been sold.
Farmers have in the past complained that they were affected by lack of adequate inputs to prepare for the summer cropping season due to limited funding.
ZMX chief executive Mr Collen Tapfumaneyi said by accepting wheat in their certified warehouses, farmers would be able to access inputs for the summer cropping season.
The ZMX provides a central warehouse receipt system and spot market trading platform for the winter wheat currently being harvested.
Mr Tapfumaneyi said privately and self-financed farmers were free to sell or market their wheat through ZMX.
“Certified warehouses across the country are ready to receive the wheat or any grain.
“With the ZMX warehouse receipt system (WRS), a farmer opens an account, books a delivery to the nearest certified warehouse and once the commodity is inspected, weighed and graded, a warehouse receipt is issued in the name of the farmer showing the tonnage, grade and farmer’s details,” he said.
The warehouse receipt is issued electronically to the farmer on their mobile phone.
The warehouse receipt financing is a financial instrument used in post-harvest financing to farmers, buyers and other warehouse receipt holders.
It helps banks access quality secured lending business at relatively lower acquisition costs and helps farmers to access much needed post-harvest financing.
The warehouse receipt acts as a certificate of title that is then used as collateral by credit providers.
A farmer is charged a handling fee by the warehouse operator and storage fees that average US$0. 10 per tonne per day with the actual amount depending on the warehouse operator.
The ZMX operates a weekly commodities auction and continuous trading excluding weekends.
“A farmer places their sell order on the ZMX platform indicating their preferred minimum price with buyers also placing their bids indicating how much they wish to buy and maximum prices they are bidding at.
“ZMX will be accepting these bids and offers throughout the day displaying them on the order screen anonymously,” he said.
Both farmers and buyers are able to adjust their prices at any time to stand a better chance of success.
If the buyer matches the price of the farmer, the order matches, the system will then calculate the average price at which the highest volume matched and then announce the results.
“After the order has matched, ZMX transfers ownership of the warehouse receipt from farmer to buyer. At the same time, it starts transferring payment from buyer to farmer’s account, a process that takes about three working days.”
Government is promoting the use of the ZMX in the marketing of agriculture produce to enhance farmer income and reduce post-harvest loses.
GMB will be focusing only on procuring grain for the Strategic Grain Reserve, with the rest of the produce being sold to private players through the ZMX.
“Broadening market options for farmers reduces fiscal burden and over-reliance on the GMB.
“This will allow market access for farmers, price discovery and convenient trading of agricultural commodities, said Mr Tapfumaneyi.
GMB is working with the ZMX to provide commercial warehouse receipt services to all players.
