Agrobusiness - Featured - Local - Top Stories - March 18, 2021

Agricultural commodities exchange ready for its launch

The nation’s first agricultural commodities exchange, Zimbabwe Mercantile Exchange (ZMX) has made constructive progress so far towards its launch scheduled on the 31st of March.

ZMX is an agriculture commodities exchange which is in partnership with Financial Securities (FINSEC), TSL Limited and it is licensed by the Agricultural Marketing Authority.

FINSEC, a subsidiary of Escrow Group is undertaking the technical implementation work in setting up the exchange. Last month, FINSEC reported that ZMX has courted three banks willing to extend credit to farmers as more progress is made towards the launch of the exchange.

A recent update on progress made so far towards the operations of ZMX shows that custodian and settlement banks, farmers, warehouse receipt financiers, commodity off takers and end users, regulators, quality inspectors and warehouses among others have been prepared.

TSL together with the Grain Marketing Board (GMB), Origen and ETG will be responsible for warehouses infrastructure and logistics. Timely implementation of the exchange means farmers from across the country will start benefiting from it this agriculture marketing season as they start selling crops harvested this year.

Just recently, BusinessMail reported that the GMB is preparing warehouses and silos for bulk storage in anticipation of a hamper harvest for this year’s marketing season which is expected to commence on the 1st of April.

FINSEC general manager Garikayi Munema said three banks have indicated willingness to extend credit facilities to farmers on the strength of warehouse receipts.

“The entire system on which the commodities exchange shall ride has been developed and tested.

“All stakeholders in the value from warehouses to final settlement at the bank have been connected and system tested and approved,” he said.

Speaking at a recent briefing with stakeholders, Escrow Group chief executive officer Collen Tapfumaneyi, said ZMX managed to get regulatory approvals and implementation would address the major challenges farmers, especially small-scale farmers faced.
“Farmers have been facing logistical challenges, communal farmers’ produce becomes unattractive, due to the cost associated with transporting the disaggregated commodities from the farmer to the buyers.

Another challenge is post-harvest losses due to limited storage options for agricultural produce hence forcing them to sell, sometimes prematurely,” said Mr Tapfumaneyi.

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