The Zimbabwe Mercantile Exchange (ZMX), said it is bullish about the prospects for this coming selling season as a result of active support from farmer unions and the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development on the exchange initiatives.
ZMX is an electronic agricultural commodity platform, which was launched in August last year and has succeeded in doing farmer engagement and awareness campaigns. According to officials, work is already underway to expand the range of commodities on the exchange by including horticulture and livestock, hence the optimistic view on this coming selling season.
Financial and Securities Exchange Limited (FINSEC) general manager Garikayi Munema said the exchange is available at this time of the season when farmers are planting as they plant, keeping in mind marketing options that will help the exchange in getting more commodities traded from the market prospects in the upcoming sales season.
“Work is already underway to expand the range of commodities on the exchange by including horticulture and livestock, that will give us access to more clients and these will be added once the appropriate legal and operational frameworks are in place,” he said.
The ZMX initiative is a partnership between the Government and the private sector-led by FINSEC, TSL Limited, and CBZ Holdings with FINSEC undertaking the technical implementation of setting up the exchange.
Farmers Unions such as Zimbabwe Farmers Union (ZFU) and Commercial Farmers Union (CFU) have thrown their weight behind the initiative through promoting ZMX to their members.
“We are very grateful for the support we are getting from the farmer unions and the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development in disseminating information to farmers across the country.
“Farmers appreciate the commodities exchange facilities which help them to reduce post-harvest losses as well as give them access to credit on the strengths of the agricultural produce which they can now use as collateral,” said Munema.
He indicated that a number of market participants that include commercial banks, custodial banks, microfinance institutions, warehouse operators, transport and logistics providers, and agro-processors have signed up to be participants in the exchange.
“We continue engaging more participants as we seek to ensure ZMX facilities are available across the country for the convenience of farmers,” Munema said.
Commodities currently listed on ZMX include red sorghum, white sorghum, millet, and soya beans, eleven other commodities are permitted to trade under the Warehouse Receipt Act (WRA), and the exchange will begin trading when the agricultural products season opens.
The remaining four commodities being, maize, wheat, soyabean and barley are currently restricted by some specific statutory instruments which limit their tradability in an open market.
Meanwhile, the exchange has traded a total of 79 969 tonnes of sorghum.
Munema said in the meantime, the trading activity has been low mainly because the exchange was officially launched at the end of the marketing season and failed to have enough time to really engage with farmers and promote commodity exchanges facilities.
“This is a new concept and it requires time, maybe a full season or so for uptake to be at the right levels.
“We have, however, used this time to onboard various participants to support the convenient trading of commodities by
farmers, especially small-scale farmers,” he said.
Meanwhile, ZMX is facing issues with limited target farmers’ awareness and pricing issues, so they are addressing this issue through ongoing farmer education programmes and focus group meetings, and are working with authorities to address pricing issues as the exchange works better at open and market-determined prices.- Business Weekly