The agriculture commodities exchange — Zimbabwe Mercantile Exchange (ZMX) — says independent consultants are finalising inspection process of warehouses that will be used for storage of commodities brought to the exchange.
This is to ensure they meet international quality standards. Several other warehouses have been identified and gone through the process, receiving approvals as well as licensing.
The inspection process seeks to assess the physical aspects of the warehouses as well as the availability of infrastructure that supports digital platforms as the entire trading process should be done online in line with growing global trends.
Currently, 16 Grain Marketing Board (GMB) depots are in the final stages of the assessment programme while inspectors have already approved Bak Storage warehouse facilities in Harare while a few sticky issues are being addressed for Mutate and Bulawayo facilities.
“Everything is now in place, the warehouses are ready to receive commodities for storage. Some have already been approved while others are in the final stages of assessment. “There is a lot that is considered because we want to meet international quality standards. Trading will be virtual so there is also need to see if these warehouses meet a certain minimum standards in terms of access to information communication technologies,”
said FINSEC general manager Garikayi Munema.
The ZMX is a partnership between Government and the private sector led by FINSEC, TSL Limited and CBZ Holdings. FINSEC, a subsidiary of Escrow Group is undertaking the technical implementation work in setting up the exchange.
Development partners such as the World Bank Group have thrown their eight 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 centred 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 WRS is expected to address one of the challenges that farmers, especially small scale face that is post harvest losses due to lack of proper storage facilities.
With the WRS farmers are guaranteed of good storage facilities for their commodities although they will bear the cost of storage as well as transportation to the warehouses.
Additionally, farmers can use their warehouse receipts as collateral when accessing funding from financial institutions .
“We already have banks that have committed to this initiative and willing to assist farmers with funding on strength of the WRS. “Right now we are continuing with on boarding participants,”
said Mr Munema.
So far some of the participants on-boarded to the platform include custodian and settlement banks, farmers, warehouse receipt financiers, commodity off takers and end users, regulators, quality inspectors and warehouses among others have been onboarded.