ZMX sets up 31 warehouses to receive wheat

 

Edgar Vhera

Agriculture Specialist Writer

THE Zimbabwe Mercantile Exchange (ZMX) has onboarded 31 certified warehouses to receive wheat or any bulk grain crop, following Government’s move to liberalise trading of grain not destined for the strategic grain reserve (SGR). 

The Ministry of Finance, Economic Development and Investment Promotion’s 2025 Budget Strategy Paper re-defined the marketing of agriculture crops saying: “Government will promote the use of the ZMX in the marketing of agriculture produce, in order to enhance farmer income and reduce post-harvest loses. In this regard, the GMB will be focusing only on procuring grain for the SGR, 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 to farmers, price discovery and convenient trading of agricultural commodities.”

In a recent media release announcing the 2024 wheat producer price, the Grain Marketing Board (GMB) concurred saying: “Furthermore, GMB working with the ZMX shall provide commercial warehouse receipt services to all players.”

ZMX chief executive officer, Mr Collen Tapfumaneyi yesterday said the ZMX will provide a central warehouse receipt system and spot market trading platform for the winter wheat currently being harvested.

“Privately financed and self-financed farmers are free sell or market their wheat through ZMX and to date 31 certified warehouses across the country are ready to receive the wheat or any grain.

“With the ZMX warehouse receipt system (WRS), a farmer opens a ZMX 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 farmers on their mobile phones.

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 is processed and issued by registered warehouse operators through ZMX’s centralised system and acts as a certificate of title that is then used as collateral by credit providers.

Explaining the modalities for warehouse receipting, Mr Tapfumaneyi said farmers are charged a handling fee by the warehouse operator as well as a storage fee that averages 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 sale 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 clarified the operational trading rules.

Mr Tapfumaneyi added that during the day both farmers and buyers can adjust their prices at any time to stand a better chance of success. If the buyer matches the farmer’s preferred price, the order matches and the system will then calculate the average price at which the highest volume matched before announcing 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.”