ZMX lays out wheat trading framework
THE Zimbabwe Mercantile Exchange (ZMX), an agricultural commodities trading platform, has put in place the logistical framework for trading wheat by farmers, contractors, and all stakeholders in the grain’s value chain.
This follows a joint announcement between the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development and the Ministry of Finance and Economic Development on the modalities for the 2022 wheat trading.
This comes as Zimbabwe is this year expected to realise its biggest harvest of the staple grain. Farmers across the country are expected to deliver a combined 380000 tonnes, representing an 80 000- tonnes increase from 2021and 20 000 more tonnes than the national requirement.
ZMX highlighted that all self-financed farmers and contractors who deliver wheat to designated warehouses shall be issued with warehouse receipts in terms of the Warehouse Receipt Act [Chapter 18:25].
The exchange rides on the Warehouse Receipt System (WRS), which is expected to address one of the critical challenges farmers have been facing, poor storage facilities, which resulted in costly post-harvest losses.
However, the Government approved several warehouses across the country including the Grain Marketing Board (GMB) depots in Aspindale, Banket, Bulawayo, Concession, Chinhoyi, Chegutu, Gweru, Lion’s Den, Magunje, Masvingo, Murehwa and Norton.
Other approved warehouses are Bak Storage and S&P Logistics in Harare.
In a circular to stakeholders, ZMX said the warehouse receipt shall be issued in favour of the farmer or contractor.
“However, for Government guaranteed schemes deliveries and issuance of warehouse receipts will only be done through GMB depots.
“Each farmer or contractor will be required to open a commodities trading account with ZMX using the *727# USSD short code across all mobile networks, www.zmx.co.zw, or the ZMX mobile app.
“Farmers or contractors shall deliver the wheat to GMB or any of the designated warehouses where the commodity shall be weighed, graded and a warehouse receipt issued in favour of the farmer or contractor,” said ZMX.
Additionally, the trading of wheat shall be in full compliance with SI 188 of 2021, which specifies the terms and conditions for the trading of wheat. The Government has highlighted that self-financed farmers and contractors may trade wheat at market prices and ZMX has the necessary infrastructure to support these trades.
“Those eligible to trade their wheat need to first obtain the necessary grain movement permits from GMB (Grain Marketing Board) if they wish to take the wheat to warehouses other than GMB depots, open ZMX accounts and receive warehouse receipts as above.
Trading in controlled agricultural commodities, including wheat, by either buying or selling without authority from the Government still remains an offence which attracts a penalty. Maize, soya beans, wheat and barley are all on the controlled produce list, which requires farmers to sell only to either the GMB or a contractor who would have financed production.
“Holders of warehouse receipts will be able to deposit the warehouse receipts with any of the participating custodian banks who will facilitate trading on the ZMX exchange,” said ZMX.
Zimbabwe anticipates 100 000 hectares of farmland growing wheat next season, which is a 25 percent increase.
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.
The exchange helps provide farmers with easier access to markets and correct pricing information as well as provide a fair price discovery mechanism and predictable pricing.