New online grain trading platform welcomed

Grain SA has welcomed the launch of TonnUp, the firstever online grain trading platform in South Africa.

Derek Mathews, Grain SA chairperson, said that his organisation welcomed any new development that would improve the grain industry and make the cash markets more transparent.

“A transparent grain industry allows more opportunities for price negotiation, which will benefit producers greatly. We wish this initiative a successful future,” he said.

According to TonnUp director Stephen Krüger, the business was the first of its kind in the country, although its formation had been preceded by extensive research on similar markets in other countries. He added that South Africa’s current grain market, which included all grains, fluctuated between 14 million and 16 million tons annually, and that less than 25% of this was traded on a formal market.

“Our target area is the 75% of the harvest that is traded informally. This includes producers selling directly to buyers such as millers and processors. We’re not in competition with the JSE and are in ongoing communication and consultation with its Safex [South African Futures Exchange] trading structures. We see Safex as the futures market, while we form the cash market,” he said.

As price-takers, farmers had very few opportunities to negotiate prices, Krüger added. Through the new trading platform, they now had the opportunity to do so. In practice, this meant that a seller could put grain up for sale on the platform at a preferred price under his or her specific registration number.

“It also affords millers, processors or other buyers [the opportunity] to put up tenders for grain at a specific location. The transport differential, as required by Safex, is cut out and buyers and sellers can negotiate transport costs between themselves,” he said.

Krüger added that TonnUp would facilitate the cashflow process so that sellers received their payments and buyers their stock quickly and efficiently.

Krüger said the objective was to make the platform as accessible as possible to small and commercial producers alike. The TonnUp platform required a minimum of 100t per transaction. Small farmers unable to meet the minimum tonnage were advised to club together and market their crops in a co-operative manner under a single registration number. – Annelie Coleman

Annelie Coleman TonnUp, the first- of-its- kind online grain trading platform in South Africa, hopes to assist in making the local grain trading market more transparent, and enable farmers to negotiate prices through direct sales to buyers such as millers and processors.