ZMX set to onboard livestock, horticulture
The Zimbabwe Mercantile Exchange (ZMX) expects to start trading livestock and horticulture products on the commodities platform, as the exchange continues to gain traction.
This will effectively bring the number of commodities to 49. Currently, there are 12 commodities on-boarded for trading on the exchange.
ZMX chief executive officer Collen Tapfumaneyi said a framework for trading the two segments was already in place and stakeholder engagements were still ongoing to iron out any sticky issues for smooth trading with appropriate infrastructure.
“We are very actively pursuing that and the frameworks for both (livestock and horticulture) are now in place. What we are now doing is to start inviting infrastructure providers. As an exchange we are facilitators that bring various stakeholders on board,” he said in an interview.
“Just like what we did with grains and oil seeds where we came up with a framework for that with warehouse operators as the infrastructure providers, we have also put in place the equivalent of warehouse operators for livestock and horticulture.
“In this case, we are looking at specialised infrastructure due to the nature of the commodities, that is cold rooms and cold chain facilities for horticulture and for livestock we are looking at tracking, grading, tagging and health issues,” he said.
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,” said Mr Tapfumaneyi.
He added that while the exchange implements active trading of the current 12 on boarded commodities during the course of the year, progress will be made for the on boarding of livestock and horticulture commodities, which will boost activity on the exchange.
Recently the Government listed the ZMX as one of the agents to facilitate trading in maize, a move which Mr Tapfumaneyi said would boost confidence in the exchange as well as increase volumes.
“This is huge for us as ZMX. Having maize trading on the ZMX means we now participate in one of the major commodities in the country,” he said.
One of the key objectives of the ZMX is to provide an open market for commodities, with willing buyer and willing seller 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.
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 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 commodity 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.-herald
