- ZMX is gradually gaining traction among farmers and traders
- As of August 2, 2023, 185 tonnes were traded at US$315 per tonne
- Soybeans was introduced this week, with 4,000 tonnes auctioned at US$480 per tonne
Harare - The recently launched Zimbabwe Mercantile Exchange (ZMX) is gradually gaining traction among farmers and traders, evidenced by improving trade volumes and commodity pricing. Operated as a public-private partnership between the government and leading financial institutions like CBZ Holdings, the ZMX aims to facilitate efficient agricultural commodity trading through its online auction platform.
Since its launch on June 21, 2023 with an initial 93 tonnes of white maize traded at US$260 per tonne, both volumes and prices have trended upwards as participant confidence grows. As of August 2, 2023, 185 tonnes were traded at US$315 per tonne, demonstrating steady price growth from the debut auction. However, volumes have fluctuated week-to-week, falling from 327 tonnes last week to 185 tonnes this week, suggesting participation levels remain inconsistent.
Encouragingly, the overall supply of commodities available for auction increased five-fold from 376 tonnes last week to 2,285 tonnes this week as more producers listed their goods. This indicates the ZMX's effort to expand its product range is succeeding in attracting sellers. Beyond white maize, soybeans were introduced this week, with 4,000 tonnes auctioned at US$480 per tonne, higher than the maize price. This large soybean supply worth US$1.9 million on the first day signifies strong farmer interest in the new platform.
Importantly, the bid and offer prices between buyers and sellers are converging, evidencing effective price discovery. Over the past month, average bids increased from US$260 to US$315 per tonne, nearing sellers' asking prices. While trade volumes fluctuated this week, the growing number of participating producers points to a healthy, liquid marketplace in development.
The ZMX conducts auctions online weekly, providing a transparent market for agricultural commodities. Following the government's deregulation of soybeans, wheat, and barley in July 2023, the exchange rapidly expanded its product scope, enabling farmers to reach a broader buyer base. The emergence of organized commodity trading is a positive development for the agriculture sector, according to experts. An efficient market improves liquidity, reduces transaction costs through competitive bids, and allows better price discovery.
ZMX executive Collen Tapfumaneyi has expressed satisfaction with the platform's early growth, particularly the breadth of participation across small and large producers. As familiarity with the modern auction process deepens, he expects volumes and liquidity to rise further. The current maize prices are already competitive with imports from South Africa, proving the exchange can become a viable sales channel for Zimbabwean farmers. Overall, the ZMX demonstrates the significant benefits organized commodity markets can provide agricultural producers through fair, market-driven price discovery.
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