Tsitsi Sandra Kawenda
The Zimbabwe Mercantile Exchange Private Limited (ZMX) maintains an Electronic Warehouse Receipt System and a Commodities Trade Platform to facilitate safe, secure, and convenient commodity trading and financing.
The purpose of the Commodity Exchange is to provide over 1, 5 million Zimbabwean farmers with access to markets and to reduce the logistical load of acquiring agricultural commodities encountered by various manufacturers, processors, and enterprises.
In simple terms, the exchange functions as follows: commodities holders (typically farmers) deliver commodities to a warehouse, the warehouse then certifies the commodities and issues an electronic warehouse receipt to the farmer who can then use the receipt as collateral, a delivery mechanism for an outright sale of the commodities or as a delivery mechanism for a financial instrument (such as a futures contract).
The Warehouse Receipt System
The Warehouse Receipt System, is essentially a network of certified warehouses that take commodity deposits and issue Warehouse Receipts that serve as proof of title to a specified quantity and quality of a commodity. The warehouse receipt (WHR) instrument has been shown to be one of the most essential tools in the opening of commodities markets and the gradual liberalisation of trade by reducing uncertainty and improving efficiency. The warehouse receipt system ensures the proper storage of goods by protecting parties from the danger of receiving the incorrect quantity, quality, or delivery location.
To meet the needs of the numerous commodities traded and financed on the exchange, ZMX maintains a network of certified warehouses throughout Zimbabwe that serve as distribution hubs for the platform.
Before being licensed for the storage and processing of goods, each of these ZMX-approved warehouses had to satisfy stringent standards.
The requirements of certification include insurance for the goods housed, frequent fumigation, stock management, risk management, auditing, and guaranteed, dependable security around the warehouse, all of which are intended to provide our clients with peace of mind.
Spot Market
ZMX provides a centralised, rule-based marketplace where buyers and sellers of various commodities and commodity-linked contracts can interact.
Potential buyers and sellers utilise internet means to gain access to the services. The platform provides transparent price discovery for all listed commodities, and traders are assured of receiving the best price at a given time.
Potential buyers and sellers place their orders directly on the platform, and the automated trading system matches them instantly.
Our clients have access to both real-time and historical market information through our digital platforms (USSD, Mobile Apps, and Web Portal) and daily market reports distributed by email and ZMX website articles. We have made this information available to all registered users of the site, regardless of whether or not they trade on the platform, as a way of decreasing market asymmetries.
This feature brings all market participants to the same level of market knowledge. Some of the data provided by the platform include:
◆ Daily market reports showing a summary of the market activity product by product.
◆ Real-time Bid Price, Bid Volume, Ask Price, Ask Volume, Turnover, Volume Weighted Average, Price and many others for each product listed on the platform.
◆ A real-time calculation of the account’s portfolio value and the breakdown.
◆ Real-time calculation of an account’s daily gain and loss.
Commodities currently listed on the Exchange
At the moment buyers and sellers can trade sugar-beans, red sorghum, white sorghum, millet and soya beans.
Soya beans pilot
The Ministry of Lands, Agriculture, Fisheries, Water and Rural Development has authorised the trade of soyabeans on ZMX as part of a trial scheme to liquidate the remaining 2022 harvest. Soya trading on the ZMX platform is in accordance with the Government’s objective to boost agricultural commodity trade on the exchange. Deposits will be made to GMB warehouses. The trade is also being conducted under the present provisions of SI145 of 2019.
ZMX has since aligned all the essential participants, including GMB, who will engage in the trading of soya beans as the Warehouse operator, issuers of warehouse receipts, and market maker.
The pilot programme was launched on August 3, 2022, and it is anticipated that the lessons learned from the pilot program will shape the continuing trading of strategic commodities on the exchange.
Trading
Trading on ZMX is highly secure and based on the principle of delivery versus Payment. Prior to the conclusion of trades, the exchange guarantees both the commodities and the funds.
Once trades are concluded, sellers are assured to get their monies on or before T+2 upon withdrawal from their bank accounts.
The platform allows trading in both ZWL and USD transactions and can be accessed by dialing *727# or downloading the ZMX mobile platform, from the Google Play Store or App Store. Alternatively visit zmx.co.zw.
◆ For enquiries WhatsApp +263 777 122 537, Call + 263 24 2754842 or e mail us on [email protected]
