Business Editor's Choice

Agro-commodity exchange, to partner with JSE

THE Zambian Commodity Exchange (ZAMACE) will soon sign a partnership agreement with JSE, a South African Stock Exchange to boost liquidity to the local agro-commodity market.
ZAMACE executive director Jacob Mwale said the agro-commodity market exchange is this year expected to start the warehouse receipt system that will revolve around trading, grading and standards, arbitration, and issuance of warehouse receipts.
Ideally, farmers will deposit grain at certified storage sites, which is linked to ZAMACE, supported by Lusaka Stock Exchange and a receipt will be issued after the grains are graded, standardised and kept in the warehouse.
The receipt will also act as collateral that can be redeemed for cash at the bank, then the market or millers can buy the receipt and get the grain.
In an interview at the just-ended Zambia Finance and Investment euromoney conferences last Friday, Mr Mwale said ZAMACE has been holding seminars to help stakeholders familiarise themselves on the trading platform.
He said the warehouse receipt system will increase farmers’ access to finance.
“We are working with JSE, and soon we will finalise a deal that will help bring liquidity to the market through ZAMACE,” Mr Mwale said.
In addition to enhancing trading of commodities, the warehouse receipt system will also enable farmers obtain credit from financial institutions based on their grain held in one of the certified warehouses as collateral.
It is anticipated that live test runs with warehouse operators will start this month. ZAMACE is currently involved in consultations over the draft rules and regulations for trading on the platform as well as draft requirements for one to be licensed as a warehouse operator.
Once the warehouse receipt system is fully operational, the grain marketing system in Zambia will become more transparent and efficient.

Facebook Feed