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Zimbabwe: Commodities Exchange to Go Live

The commodities exchange, the Zimbabwe Mercantile Exchange (ZMX), is doing final engagements with key stakeholders such as farmers before the exchange goes live this month.

The engagements are to iron out any sticky issues to ensure a smooth flow of business once the exchange is operationalised, with a launch scheduled for March 31.

This week, farmer organisations have come forward with their input highlighting any concerns as well as showing support for the initiative, which is expected to boost the agriculture sector, from small holder to large scale farmers.

Commercial Farmers Union economist Chrispen Mununga, said farmers were looking forward to a platform that provides transparency, enhance the sustainability of farming activities, formalisation of small holder farmers as well as access to credit facilities through collateralisation of agriculture produce.

“They (farmers) are hoping the system will assist in closing the gaps caused by middle-men and stimulate price discovery,” he said.

The commodities exchange will be anchored on the warehouse receipt system (WRS).

This 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.

Experts say the WRS provides an organised market of authorised formal players across the agricultural commodities value chain as well as encourage formalisation of small scale farmers, which will ensure the sustainability of the farming activities.

Financial and Securities Exchange Limited (FINSEC) general manager, Mr Garikayi Munema, said more engagements were lined up with farmers to give live demonstrations on how the exchange works and the entire process involved when selling produce.

“We have been having market engagements teaching the actual farmers, starting with farmer unions to explain the concept and get their input and recommendations.

“Before the actual launch, we will go to the farmers and demonstrate the process so that they know exactly what to do at each stage.

“One of the key concerns that have been raised by farmers is on pricing and the commodities exchange will address such challenges and ensure farmers get a fair price for their produce. This will also enhance their access to credit. We want to see, for instance, small scale farmers start to view farming as a business,” Mr Munema told The Herald Finance & Business.

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.

The ZMX initiative is a partnership between Government and the private sector led by Financial and Securities Exchange Limited (FINSEC), TSL Limited and CBZ Holdings with FINSEC undertaking the technical implementation work in setting up the Commodities Exchange.