Andrew
Enacy Mapakame
Successful implementation of the agricultural commodities exchange — the Zimbabwe Mercantile Exchange (ZMX) — has the potential to connect markets across Zimbabwean borders, empowering actors in the sector through enhanced regional trade, an official has said.
The exchange was launched last year and operates an electronic warehouse receipt system (WRS) and a commodity trading platform for the trading and financing of agricultural commodities.
This will allow farmers — especially smallholder farmers — to unlock value, increase productivity and improve their earnings in the long run.
For years, farmers have suffered mispricing of their commodities and limited markets, as well as post-harvest losses, due to lack of good storage facilities.
But the ZMX addresses these challenges, riding on the successful implementation of the WRS.
ZMX board chairman Mr Derek Odotoye said there was hope in the ZMX, with the opportunity to transform lives, especially for smallholder farmers who have also faced challenges in accessing funding for the expansion of their agriculture projects.
“We strongly believe ZMX has the potential to change the lives of every Zimbabwean and go beyond our borders by connecting markets abroad to meet your demands as providers of finance and credit facilities to producers of various commodities, off-takers and agro-processors,” he said during a stakeholders’ meeting in Harare last week.
The implementation of ZMX comes at a time the country is targeting to maintain growth momentum, with GDP growth expected to be 3,8 percent for 2023, supported by key economic sectors such as mining and agriculture.
As part of wider agricultural reforms, the agriculture marketing framework will be reviewed to allow the development of a strong agriculture commodity market, anchored on ZMX’s implementation of the WRS.
According to ZMX chief executive officer Mr Collen Tapfumaneyi, the WRS helps in establishing a centralised database of commodities accepted, graded and stored by authorised warehouse operators, with farmers getting warehouse receipts that give them access to post-harvest finance and the power to decide when to sell their commodities.
“Warehouse receipts will be instruments of trading. WRS will be the backbone of the exchange and all participants involved, including warehouse operators and warehouse persons, will have to comply with warehouse receipt regulations,” he said adding warehouse receipts provide collateral management, thereby facilitating post-harvest financing to farmers.
So far, the exchange has started issuing warehouse receipts, with 72 000 tonnes of wheat warehouse receipts issued to date and ready for trading.
This comes as all the groundwork, including the onboarding of warehouses for the operationalisation of the exchange, are now in place, although trading is yet to commence.
“Trading has not started yet because trading is facilitated through warehouse receipts and our focus has been onboarding warehouses, onboarding warehouse operators, banks and other financial institutions and investors, and we have done that,” said Mr Tapfumaneyi.
The exchange has, however, also highlighted that trading of wheat shall be in full compliance with SI 188 of 2021, which specifies the terms and conditions for the trading of wheat.
Meanwhile, the exchange approved warehouses that will issue warehouse receipts are GMB depots — Aspindale, Banket, Bulawayo, Concession, Chinhoyi, Chegutu, Gweru, Lion’s Den, Magunje, Masvingo, Murehwa, Norton, Bak Storage and S&P Logistics, Harare.
The ZMX initiative is a partnership between Government and the private sector — led by Financial and Securities Exchange Limited, TSL Limited and CBZ Holdings.
Online Reporter