ZMX launches weekly Agricultural Commodities Auction
Edgar Vhera Agriculture Specialist Writer
THE Zimbabwe Mercantile Exchange (ZMX) will on Wednesday next week launch the weekly agricultural commodities auction.
This is on the backdrop of conferment of liquid asset status on warehouse receipt instruments (WRI) by the Reserve Bank of Zimbabwe (RBZ) recently.
In a notice to stakeholders yesterday, the ZMX announced that it was launching its weekly agriculture commodities auction on June 21 from 0800 to 1600hrs.
The auction will be conducted online every Wednesday of the week at the same time.
“The auction is in accordance with the ZMX Trading Rules gazetted in Statutory Instrument (SI) 184 of 2021 and will start with maize and eventually include all other commodities listed on the exchange,” continued the notice.
The weekly auction comes as an addition to the existing normal trading where orders are posted and matched continuously.
“With the auction, buy and sell orders are also posted continuously but matched at the end of the auction with one clearing price. The mechanics of the auction are designed to cater for as many buy and sell orders as possible, allowing buyers and sellers with similar needs to meet in the market at once,” said the notice.
The commencement of the auction follows the ongoing registration of buyers, sellers, traders and contractors as well as the issuance of warehouse receipts, added the notice.
ZMX informs interested participants that registration was still open with the law requiring one to register with ZMX and Agricultural Marketing Authority (AMA).
Upon registration, farmers and contractors can deposit their commodity into ZMX certified warehouses and receive warehouse receipts that will be used for trading.
Centre for Agriculture and Food Policy (CAFP) research, capacity building and outreach programme manager Mr Alfios Mayoyo recently said the regulated Warehouse Receipt System (WRS) makes formal storage, marketing and finance accessible to the smallholder farmers while also allowing for participation by medium and large-scale actors.
“One benefit of involvement of medium and large-scale actors is the likelihood of the WRS and ZMX being financially sustainable over short-to-medium term.
“Another benefit of the WRS is it aligns with the policy goal of scaling down Government’s involvement in food grain marketing without losing control,” said Mr Mayoyo.
He said it was possible for Government to channel its grain procurement and sales to major processors through ZMX.