Soya beans trading debuts on ZMX

Soya beans trading debuts on ZMX

Soya beans will make its trading debut today on the Zimbabwe Mercantile Exchange (ZMX) platform following its launch yesterday.

The trading will provide farmers and commodity traders with direct access to a transparent and real time trading platform.

All trades will be warehouse receipt-based and the matched trades will settle on T+3 cycle.

The GMB will be the market maker, which will be the buyer to the seller and the seller to the buyer.

It comes after the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development approved the listing of soyabeans on the exchange on a pilot programme and in compliance with existing rules and regulations governing trading of agricultural commodities.

The trading framework is based on several instruments including the Warehouse Receipt Act (Chapter 18:25), Statutory Instrument (SI) 224 of 202, SI 97 of 2021 and SI 118A of 2022, among others.

Speaking at the launch yesterday, ZMX chief executive officer, Collen Tapfumaneyi, hailed the government for enabling the trading of one of the strategic crops.

“We are delighted to usher in a new era in the trading of commodities in our country for the benefit of hard-working producers, our processors, and the economy at large.

“We are very delighted and grateful to be sitting here with the government where one of the strategic commodities is going to be traded on an open market,” Tapfumaneyi said.

In a speech read on his behalf, permanent secretary in the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development, John Basera said:

“This trading is starting as a pilot that will allow decision and policy makers to draw lessons that will help set the modalities for the subsequent trading of other strategic grains on the platform without jeopardising the food and nutrition security of the country.

“This is a major stride towards a private sector led and public sector facilitated agriculture market economy in line with the dictates of the National Development Strategy 1.”

He said five financial institutions have come on board to offer credit services to farmers on the strength of issued Warehouse Receipts.

These include CBZ, FBC, CABS, AFC Bank and Virl Microfinance.

Through the General Notice 469 of 2020, the Warehouse Receipt was declared a security documents in terms of the Securities and Exchange Act (Chapter 24:25) when issued by a certified Warehouse Operator so as to make it more secure for the banks.

Representing the buyers at the platform Busisa Moyo, the CEO of United Refineries Limited, commended that public and private partnership was the way to go in terms of developing the country.

“As buyers we are ready to participate. Private sector and public sector partnership is a good thing  and that’s the  only we are going to move this country forward  and as public sector and private sector come together to facilitate and create platforms such as ZMX  such that we can have markets.’’

He added: “If those markets allow for price discovery it is a very good thing. I’m glad that the ZMX is IT enabled and it allows for price discovery that empowers players and economic players to participate.

It also allows a measure of predictability on the side of farmers and for us as buyers we can do our fundamental analysis and participate in options or derivatives. All those are opportunities that our country is ready for as far as commodities are concerned.’’

The ZMX was launched in August last year as a private sector initiative with government support.

Last month, the government approved the acquisition of 20% shareholding in ZMX and committed US$360 000 as capital contribution.

This move transformed ZMX into a Private-Public Partnership, between the Government represented by Grain Marketing Board (20%) and FINSEC (22.5%), TSL (22.5%), and CBZ Bank (35%).