Enacy Mapakame
Business Reporter
Government has promulgated Statutory Instrument (SI) 184 of 2021 that will operationalise the much-awaited agriculture commodities exchange, the Zimbabwe Mercantile Exchange (ZMX).

In this regard, the exchange originally scheduled for launch during the first quarter of 2021 is expected to go live next month following establishment of the rules and regulations.

Through the SI, the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement has provided rules and regulations that will guide trade on the ZMX.

“These regulations may be cited as the Agricultural Marketing Authority (Zimbabwe Mercantile Exchange) Rules, 2021.

“The exchange, through these rules has set up an end-to end and fully automated commodities market to enable the trading and settlement of commodity-based warehouse receipts such as, but not limited to, warehouse receipts.

“These rules set out the manner in which the exchange shall also govern an efficient, orderly, fair, and transparent market for the trading of commodities and protect the integrity of the market, the functioning of the central warehouse receipt registry, issuance of dematerialised warehouse receipts, the trading and settlement thereof and or the pledging of such warehouse receipts,” reads part of the Statutory Instrument.

The ZMX initiative is a partnership between Government and the private sector led by Financial and Securities Exchange Limited (FINSEC), TSL Limited and CBZ Holdings with FINSEC undertaking the technical implementation of setting up the exchange.

Development partners such as the World Bank Group have thrown their weight behind the initiative, spearheading the Warehouse Receipt System (WRS) through providing technical expertise.

The Food and Agricultural Organisation (FAO) have also come in handy with further assistance in research and policy formulation together with Agricultural Policy Research Institute (IAPRI) for technical assistance centered around how small holder farmers can participate in the mainstream economy.

The GMB is one of the key strategic partners providing warehouses together with TSL Limited, Origen as well as ETG.

The ZMX will be anchored on the warehouse receipt system (WRS).

This helps in ensuring an efficient market with a fair price discovery system that gives access to both local and international commodity buyers and better margins for the farmers.

Experts say the WRS provides an organised market of authorised formal players across the agricultural commodities value chain as well as encourage formalisation of small scale farmers, which will ensure the sustainability of the farming activities.

So far, market participants that include custodian and settlement banks, farmers, warehouse receipt financiers, commodity off takers and end users, regulators, quality inspectors and warehouses among others have been on-boarded to the ZMX platform as it readies to go live.