eBusiness Weekly
Business Writer
Farmers and traders are gradually warming up to the Zimbabwe Mercantile Exchange, with the commodities market improving in terms of both volume traded and pricing.
The Zimbabwe Mercantile Exchange (ZMX) is registered by the Agricultural Marketing Authority (AMA) to operate a commodities exchange. It also operates a Warehouse Receipt System according to the Warehouse Receipt (General) Regulations, 2020.
On June 21, 2023, ZMX introduced a maize auction system, with 93 tonnes traded at a price of US$260 per tonne on the first day.
The price has been gradually increasing.
And one month later, both volume and price have since gone up after 327 tonnes were traded at a price of US$310 per tonne during this week’s auction.
The ZMX auction is conducted weekly online every Wednesday.
Amid the growing confidence, more crops are being added to the auction system in addition to maize.
The marketing and trading of soyabean, wheat and barley has also been liberalised following the gazetting of Statutory Instruments 129 and 130 by Government on July 21, 2023.
Market observers see the auction as a significant step toward the establishment of organised markets.
Following the gazetting, self-financed farmers and private contractors may now sell these commodities through ZMX.
ZMX has since taken advantage of the developments and has added soyabean, sugar beans, sunflower, white sorghum, red sorghum and wheat to the auction system.
Commentators see this as positive sign for sellers as they start to realize fair price for their produce.
A well-functioning commodity market can enhance market efficiency by improving liquidity, reducing transaction costs and fostering competition.
This can lead to better allocation of resources.
In a previous interview with this publication Financial Securities Exchange chief executive officer Collen Tapfumaneyi, whose company runs ZMX, expressed his satisfaction with the level of participation of both large and small players.
“It’s great to see an increase in the volume of commodities being traded. It gives us confidence that the auction concept is gaining familiarity among participants.
“This bodes well for the future, as we can expect to see higher trading volumes and a more liquid market,” said Tapfumaneyi.
As more buyers and sellers become acquainted with the benefits of the auction, he added, they expect the number of participants to gradually increase.
“Additionally, as the range of commodities offered on the auction platform widens, we can expect to see increased interest from a broader range of market participants.”
Market experts say the auction provides farmers with an opportunity to sell their grain directly to different market players.
Dr Reneth Mano, an agribusiness development practitioner, said the prices prevailing on the ZMX auction are competitive to the landing price of maize from South Africa.
