ZMX to commence auctioning agric produce
Agriculture commodities exchange, the Zimbabwe Mercantile Exchange (ZMX), will commence auctioning of approved commodities on the 21st of this month, broadening the market.
According to the ZMX, the weekly auction will be conducted online every Wednesday, in accordance with the ZMX trading rules as espoused in the Statutory Instrument 184 of 2021 starting with maize and eventually including all other commodities listed on the exchange.
The auction system is practised the world over as a safe trading platform for agricultural produce, as it benefits market forces freely determined by buyers and sellers.
“The auction comes as an addition to the existing normal trading where orders are posted and matched continuously,” said ZMX chief executive Collen Tapfumaneyi.
“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,” he said.
The exchange was launched in 2021 and operates an electronic warehouse receipt system (WRS) and a commodity trading platform for the trading and financing of agricultural commodities.
A WRS enables commodity holders like farmers to deposit their crops with a designated warehouse in exchange for a receipt which is a negotiable instrument that can be used as collateral for credit facilities or for spot trading.
Since its launch, the exchange has been growing, creating an organised market-place for the country’s agricultural produce.
Currently, the exchange has 12 commodities on-boarded for trading and plans are underway to broaden scope to include livestock and horticulture produce, which will bring the total number eligible to 49.
In a previous interview, Mr Tapfumaneyi said once infrastructure providers were admitted, then the exchange would start implementing trading of the two segments on the platform, scheduled to start by year-end.
“Active discussions are underway and both should be fully operational by year-end,” he said.
Recently the Government listed the ZMX as one of the agents to trade in maize, a move expected to boost confidence in the exchange as well as increase volumes.
Now, the commencement of the auction system further broadens the scope of the exchange, following the registration of buyers, sellers, traders and contractors as well as the issuance of warehouse receipts that has been ongoing.
Mr Tapfumaneyi said: “Registration of participants is still open. Interested participants who have not done so, are required to register with both ZMX and Agricultural Marketing Authority (AMA) as required by the law.
“Once registered, farmers and contractors can deposit their commodity into ZMX-certified warehouses and receive warehouse receipts that will be used for trading.
“We look forward to welcoming all interested parties to participate in the ZMX Commodities Auction.”
The ZMX initiative is a partnership between the Government and the private sector led by Financial and Securities Exchange Limited (FINSEC), TSL Limited and CBZ Holdings.
One of the key objectives of the ZMX is to provide an open market for commodities, with willing buyers and willing sellers providing price discovery mechanisms.
The exchange also ensures a timeous settlement of transactions, on a willing buyer willing seller basis with both parties agreeing on the price.
Source Link :- https://www.herald.co.zw/zmx-to-commence-auctioning-agric-produce/
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