Maize trading liberalised in Zimbabwe

The Zimbabwe Mercantile Exchange (ZMX) will begin trading maize on the commodities market after the Government liberalised the trading in the strategic grain.

ZMX contends the development would boost volumes on the exchange.

The development is with effect immediately allowing producers to start trading on their maize from the current cropping season on the exchange.

In an interview, ZMX chief executive officer (CEO) Collen Tapfumaneyi said bringing a major commodity like maize to the exchange would push volumes and boost confidence in the exchange.

He also pointed out that this move enables the exchange to fully realise its mandate of facilitating the trade of the country's agricultural commodities, allowing farmers to enjoy a fair price discovery.

"This is huge for us as ZMX. Having maize trading on the ZMX means we now participate in one of the major commodities in the country," said Mr Tapfumaneyi.

One of the key objectives of the ZMX is to provide an open market for commodities, with willing buyers and willing sellers providing price discovery mechanisms. The exchange also ensures a timeous settlement of transactions, on a willing buyer, willing seller basis with both parties agreeing on the price.

"This would not work if major products are subject to restricted trading or monopoly. That is contrary to what the commodities exchange is all about.

"Maize volumes are huge in this country, it outstrips any other commodities on the market, so when you set up a commodities exchange that does not allow for its trading, then the business will be very low.

"And when you get it, it makes good business sense so we are happy to be listed as one of the buyers for such a strategic commodity," he said.

Through Statutory Instrument (SI 56 of 2023) Minister of Lands, Agriculture, Fisheries, Water and Rural Development Dr Anxious Masuka listed ZMX as one of the authorised agencies to participate in the trade of maize.

According to Government, "authorised agency" means "(a) any Government parastatal or entity acting on behalf of the Government that is involved in the collection, storing, distribution or marketing of agricultural produce; or (b) the Zimbabwe Mercantile Exchange;  and "authorised person" shall be construed accordingly."

The SI also states that a registered self-financed farmer who is a maize producer or seller (whether registered as an individual, statutory body, company, entity or other person) may sell or otherwise dispose of any maize through a certified warehouse registered with the ZMX or to the Grain Marketing Board (GMB).

However, producers who receive Government support and are mandated to sell their maize to the GMB are still obliged to do so.

"Any maize which is required to be sold to the GMB under subsection (1) shall be delivered to the GMB at such time, place, and quantities as the board may direct and under such terms and conditions as the GMB may provide.

"Any maize which is sold to the GMB by a self-financed farmer under subsection (3)(b) [or by a contractor referred to in section 6(4) shall be delivered to the GMB under such terms and conditions as the GMB may provide," reads part of the SI.

The SI also states that no person who is not a producer of maize, or a contractor or the agent of a producer or contractor authorized to sell the maize on his, her or its behalf or a self-financed farmer shall sell maize to the GMB, except on conditions approved by the Minister and on terms that not more or less favourable than those under which it buys maize from producers, contractors, self-financed farmers (or their authorized agents) at the date of the sale.