Commodities exchange ready to open

Government has promulgated statutory Instrument (SI)184 of 2021 that will operationalize the much-awaited agriculture commodities exchange, the Zimbabwe Mercantile Exchange (ZMX). In this regard the exchange originally scheduled for launch during the first quarter of 2021 is expected to go live this month following the establishment of the rules and regulations. Through the SI, the Minister of Lands, Agriculture, Fisheries Water and rural settlement has provided the rules that will guide trade on the ZMX. These regulations may be cited as the Agricultural Marketing Authority (ZMX) Rules, 2021 not limited to warehouse receipts. These rules set out the manner in which the exchange shall also govern an efficient, orderly, fair, and transparent market for the trading of commodities and protect the integrity of the market, the functioning of the central warehouse receipt registry, issuance of dematerialized warehouse receipts, the trading and settlement thereof and or the pledging of such warehouse receipts., reads part of the Statutory Instrument. The ZMX initiative is a partnership between the government and the private sector led by the Financial and Securities exchange Limited (FINSEC), TSL and CBZ Holdings with FINSEC undertaking the technical implementation of setting up the exchange. Development partners such as the World Bank Group have thrown their weight behind the initiative, spearheading the Warehouse Receipt System (WRS) through providing technical expertise technical assistance centered around how small holder farmers can participate in the mainstream economy. The GMB is one of the strategic partners providing warehouse together with TSL Limited, Origen as well as ETG. The ZMX will be anchored on the warehouse receipt system. 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. Expects say the WRS provides an organized market of authorized formal players across the agricultural commodities value chain as well encourage formalisation of small-scale farmers, which will ensure the sustainability of the farming activities. So far, market participants that include custodian and settlement banks, farmers, warehouse receipt financiers, commodity off taker and end users, regulators, quality inspectors and warehouses among others have been on- boarded to the ZMX platform as it readies to go live.

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  1. “The Zimbabwe Mercantile Exchange shall be based on warehouse receipt system and is designed to support agricultural development in Zimbabwe. This exchange will provide convenience and efficiency in the marketing of agricultural commodities and this will ensure enhanced profitability, access to markets, finance and credit for farmers,” Ncube said.

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