The Zimbabwe Mercantile Exchange (ZMX) has commenced the pilot soya bean trading making it the first of the strategic commodities to be traded on the exchange.
This follows government approval to onboard soya beans with other strategic commodities such as maize and wheat still not tradable.
ZMX was launched in October last year and now has a total of 49 commodities tradable comprising of 18 grain commodities, 22 horticulture products and 7 livestock.
“This trading is starting as a Pilot that will allow decision and policy makers to draw lessons that will help set the modalities for the subsequent trading of other strategic grains on the platform without jeopardizing the food and nutrition security of the country,” said Dr John Basera, Secretary for Lands, Agriculture, Fisheries, Water and Rural Development, in a speech read on his behalf.
The launch of the ZMX leveraged on the existing Warehouse Receipt Act of 2006 and follows the putting in place of supportive pieces of legislation.
The Warehouse Receipt Act (2006) identifies 18 commodities which can participate on the Warehouse Receipt System. SI 108 2022 announced the addition of 22 horticulture products and 7 livestock and livestock products, bringing the total number of commodities on the schedule of commodities allowable for trading under the warehouse receipt system and commodity exchange to 49.
Government approved the acquisition of 20 percent shareholding in ZMX and committed US$360 000 as capital contribution. This move transformed ZMX into a Private-Public Partnership, between Government represented by Grain Marketing Board (GMB) (20%) and FINSEC (22.5%), TSL (22.5%), and CBZ Bank (35%).
The commencement of soya beans trading on the ZMX is expected to deal with the scourge of side-marketing and also incentivize private sector soya bean value chain financing.
“We are riding on the storage or warehousing infrastructure of GMB to reduce post-harvest losses,” said Escrow Group chief executive Collen Tapfumaneyi.
Soya bean trading under ZMX will provide farmers and commodity traders with direct access to a transparent and real-time trading platform, which integrates easier payments processes that involve a mobile, online and USSD platform for the convenience of farmers.
Oil Expressers Association president Busisa Moyo welcomed the onboarding of soya beans on the exchange saying this would help in establishing market driven price discovery mechanism which will improve farming of soya beans in the country which was currently very low.
“Markets are good for private sector if they allow for price discovery. It empowers players and economic players to participate,” said Moyo.