Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Ncube, agricultural officials to finalise setting up of Comez

Ncube, agricultural officials to finalise setting up of Comez

November 18, 2012 in Business

INDUSTRY and Commerce minister, Welshman Ncube is set to meet officials from 
the Ministry of Agriculture later this month to finalise the setting up of 
the Commodity Exchange of Zimbabwe (Comez).


Comez is an organised market place where trade, with or without the physical 
commodities, is funnelled through a single mechanism, allowing for maximum 
effective competition among buyers and sellers.

Its operation had apparently been stalled by lack of co-ordination between 
various government bodies and a chronic shortage of funding.
“We are yet to meet with the Agriculture ministry officials but cabinet 
decided that government should come up with capital to set it up,” said 
Ncube. “That is why there is the participation of permanent secretaries in 
the ministries of finance, agriculture, industry.”

An inter-ministerial committee tasked with assessing the operational 
requirements for setting up Comez had not yet provided feedback on progress 
made to date.

Delays in setting up the exchange were primarily caused by overlapping 
mandates and “turf wars” between the envisaged commodity exchange, the 
Agricultural Marketing Authority and the Ministry of Agriculture, 
Mechanisation and Irrigation Development.

“Issues centred on the responsibility of marketing the commodities once the 
exchange was set up and there was a lack of clarity over who was in charge 
of what,” said Ncube.

He said a Private Public Partnership initiative with financial institutions 
and other concerned private sector stakeholders would go a long way towards 
facilitating the smooth functioning of the exchange, in consideration of the 
prevailing economic challenges.

“Private sector participation is certainly encouraged, as it will be a 
public company with stakeholders such as financial institutions and other 
interested institutions,” Ncube said, adding that a prospectus has already 
been drawn up.

In his budget presentation last week, Finance minister Tendai Biti 
underscored the importance of setting up Comez, noting how farmers’ fortunes 
depended on its functionality.

“The commodity exchange must be established next year. Farmers must be able 
to take their crop to the market and be paid there and then.
Cabinet has spent a lot of time dealing with this issue,” he said.

For agricultural commodities, trading would be on the basis of warehouse 
receipts issued by the exchange operated or approved warehouses which 
guarantee quality and quantity of products.

The preceding exchange, the Zimbabwe Agricultural Commodities Exchange, 
folded in 2001 after the Grain Marketing Board (GMB) was granted a monopoly 
to purchase wheat and maize.

Market distortions which consequently affected the smooth flow of trade 
became prevalent as the GMB set the maximum buying and selling prices.

GMB monopoly ended in 2009 following the market liberalisation that came 
with the inclusive government.

The exchange would also maintain a system of market surveillance where 
experts monitor market player’s behaviour in order to protect the market 
from manipulation, speculation and other malpractices.


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