ZMX issues 200,000 tons of warehouse receipts
The Zimbabwe Mercantile Exchange (ZMX) has made significant progress since its inception last year, issuing more than 200,000 tonnes of warehouse receipts during its pilot window, an official said.
The ZMX is an agricultural commodity trading platform with automated electronic warehousing and receiving capabilities.
Speaking at the platform’s buyers’ breakfast on Friday, ZMX CEO Collen Tapfumaneyi said they had made significant progress since their inception on October 18, 2021.
“Milestones so far we have registered 22 warehouses and we have five financial institutions,” Tapfumaneyi said.
“These are lenders who have joined us in expressing their interest in funding against various commodities.
“We have nine traders who have signed up and we have three products out of the 49 we have listed so far because we have been in the pilot window, but having these sessions now is a signal to say that we are now exiting the pilot and now we become full fledged.
“We have 49 products because we added a lot of horticultural and livestock products.
“So far during the pilot window, we have issued 220,000 tons of warehouse receipts.
“These are largely about corn.”
He said that all the modalities to start marketing the wheat have been put in place and next week they will start marketing the commodity.
“We will soon be listing all other grain and oilseed products, but for horticulture and livestock, we are inviting warehouse operators who can provide specialist facilities to handle these products,” he said. -he declares.
Tapfumaneyi said trading in non-strategic commodities will be based on a rolling auction basis and all buyers and sellers are allowed to participate.
In non-strategic products, he said the price is influenced by market forces which are supply and demand and are allowed to fluctuate within set ranges.
Tapfumaneyi pointed out that the strategic commodities wholesale market will only operate during the declared “wholesale market period”, which is declared by the exchange after consultation with the government.
“The auction will have an opening price that closely follows the economic value of the respective product,” he added.
“This price will be calculated using the average of various reference markets for agricultural products.
“In the auction, prices are only allowed to move within a 20% range both up and down.”
The managing director of ZMX said Zimbabwe would benefit from this initiative in that there is now an incentive to produce and maintain quality standards.
He said there is a punishment for bad quality and an incentive for good quality.
ZMX Chairman Derek Odoteye said the platform has the potential to change the lives of Zimbabweans.
“It has the potential to reach beyond our borders by connecting overseas markets to meet your demands as buyers, processors and producers of various products,” Odoteye said.
Agricultural Marketing Authority CEO Clever Isaya, represented by Compliance Officer Peter Mudzimire, called on investors to consider setting up horticulture and livestock warehouses so that these products can also be traded on the platform.
“We are also looking for export opportunities to be part of future ZMX routes as well,” Isaya said.
The ZMX was designed to limit the warehousing and price discovery problems associated with agricultural products, which local farmers encounter in their operations.
The initiative also aims to address the challenges faced by farmers in marketing their agricultural products, which include limited and often expensive logistics and inappropriate or inadequate storage facilities.
The problems resulted in significant post-harvest losses for farmers.
This year, the government approved the acquisition of a 20% stake in ZMX and committed up to US$360,000 as a capital contribution.
The other shareholders are Financial Securities Exchange (Private) Limited with (22%), TSL Limited (22.5%) and CBZ Holdings (35%).