ZIMBABWE – The much-anticipated Zimbabwe Mercantile Exchange (ZMX) will be launched on April 30, an extension by one month from the initially slated date of March 31.
The extension according to The Herald, is aimed to give allowance for the requisite approvals and promulgation of statutes.
The commodity exchange has been developed through a Public-Private Partnership between the government, Financial Securities Exchange Limited (FINSEC), TSL Limited and CBZ Holdings Limited.
“This change will allow for the completion of final lawful approvals as well as enactment of statutes relevant to the commodities exchange.”Financial Securities Exchange Limited
Further assistance in research and policy formulation was drawn from the Food and Agricultural Organisation (FAO) and Indaba Agricultural Policy Research Institute (IAPRI) who rendered technical assistance centred around how small holder farmers can participate in the mainstream economy.
FINSEC, a subsidiary of Escrow Group is undertaking the technical implementation work in setting up the exchange.
TSL together with the Grain Marketing Board, Origen and ETG will be responsible for warehouses infrastructure and logistics.
“Stakeholders and the public are advised that the launch of the Commodities Exchange, Zimbabwe Mercantile Exchange is now scheduled for 30 April 2021 instead of the previously announced 31 March 2021.
“This change will allow for the completion of final lawful approvals as well as enactment of statutes relevant to the commodities exchange,” said Finsec.
Meanwhile, processes critical to an effective launch of the system are ongoing, said Finsec.
“In the meantime, preparations for the launch and operationalisation of the exchange are continuing. These include the ongoing pilot project as well as participant onboarding.
“The partners to the project, that include Financial Securities Exchange; TSL Limited; CBZ Bank and the Government of Zimbabwe, together with development partners FAO; IAPRI and World Bank are now stepping up training; awareness and publicity campaigns ahead of the launch,” it added.
ZMX anchored to warehouse receipt system
The exchange will be anchored on the warehouse receipt system (WRS), which helps in ensuring an efficient market with a fair price discovery system that gives access to both local and international commodity buyers and better margins for the farmers.
The WRS which will be used helps increase access to credit facilities through collateralisation of agricultural produce and enhance the farmers’ contribution to employment creation, environmental conservation and economic development.
With the (WRS) farmers are guaranteed of good storage facilities for their commodities although they will bear the cost of storage as well as transportation to the warehouses, with provision of payments being made later after sale of commodity.
No strategic commodities at commodities exchange
While ZMX has 18 commodities that will trade on it, strategic grains such as maize will not be traded on the exchange in compliance with the country’s laws.
Responding to questions during a stakeholder’s monthly progress update meeting on the Warehouse Receipt System and Commodity Exchange, Financial and Securities Exchange Limited (FINSEC) general manager Mr Garikayi Munema, said while the commodities exchange anticipates trading of most agricultural products in the country, maize will not be allowed to trade for now until further notice.
“We will be in compliance with SI 145, which makes GMB the sole trader of maize, they will continue in that role. This means the commodities exchange will at the moment focus on non-strategic grains and other commodities like ground nuts,” he said during the virtual meeting.
The commodities exchange allows free participation of private players in the trading of available commodities.
But SI 145 controls the sale and delivery of maize as well as with its acquisition and disposal.
It prohibits buying and selling of grain between private individuals and companies and allows GMB to be the sole buyer of corn.
The SI also stipulates that no person or statutory body or company or entity shall but of otherwise acquire any maize from any farmer or producer otherwise than through the GMB.
It also limits the amount of maize that one is allowed to transport unless delivering to the GMB as well as forbids non producers of maize or contractors to sell maize to GMB.
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