Vusumuzi Dube
Judith Phiri, Business Reporter
THE Zimbabwe Mercantile Exchange (ZMX) has started registering farmers and buyers for the 2023 marketing season to enable them to trade their commodities as they harvest.
Launched in 2021, ZMX is an agricultural commodities trading platform with automated electronic warehousing and receipting capabilities. It is operated by the Financial Securities Exchange and was founded as a joint venture between the Financial Securities Exchange (FINSEC) and the TSL Limited representing the private sector and the Government of Zimbabwe.
In an interview, ZMX chief executive officer (CEO), Mr Collen Tapfumaneyi said the trading was available for 12 commodities, these inclusive of maize, red sorghum, white sorghum, millets, soya beans, wheat, barley, sunflower, groundnuts, sugar beans, cow peas and roundnuts (bambara nuts).
“As a licensed commodities exchange, we are operating the warehouse receipt system where farmers deposit their commodities and get a warehouse receipt that they can use to either sell their commodity or access credit finance from banks and other financing institutions. We also operate what we call a spot market trading platform that enables farmers and buyers to trade commodities. We are currently allowed to trade 49 commodities. This being the start of the 2023 marketing season, ZMX is now ready to start registering farmers and buyers to trade their commodities as they harvest,” he said.
Mr Tapfumaneyi said they also have an option of forward market, where farmers and potential buyers agree ahead of time in terms of when they will be selling each other a commodity.
“Forward contracts are commonly used in commodity trading as a tool for managing price risks. The advantage is that the farmer is able to get an off-taker or a buyer ahead of the marketing season while a buyer is able to secure the commodity and the price,” he added.
Speaking on their recent participation at the 63rd edition of the Zimbabwe International Trade Fair (ZITF), as first-time exhibitors, he said they were excited and were going to be a permanent feature at the trade showcase.
“Anybody connected with agriculture and farming took an interest in what ZMX does because everyone who is into farming generally wants to get easy access to markets, fair pricing and also get paid early. So that was of very much interest and most of the industrialists and organisations that process agricultural produce were also interested in what ZMX. This was because it is in their interest to be able to access commodities, offtake them and buy them at fair prices so that they are able to run their industry and produce commodities that go into our households.”
The Government has said the broad functions of ZMX were instrumental in getting rid of challenges such as limited market access for small-scale producers, price volatility, price discovery challenges, post-harvest losses and agricultural funding challenges because of lack of collateral security and other market-related issues.
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