Story by Tichaona Kurewa
IN a strategic move to enhance agricultural trade within the region, key commodity exchanges have signed a Memorandum of Understanding (MOU) to foster closer cooperation and integration.
Following the success of the Southern African Power Pool (SAPP), which has been overseeing regional electricity trading since 1995, four major commodity exchanges have come together to streamline the trade of surplus and deficit commodities such as maize and wheat.
The signatories include the Agricultural Commodity Exchange for Africa (Malawi), the Zambian Agricultural Commodity Exchange (ZAMACE), the Zimbabwe Mercantile Exchange (ZMX), and the Tanzania Mercantile Exchange (TMX).
The MOU seeks to promote regional collaboration, improve market efficiency, enhance price discovery, increase liquidity, and create more opportunities for both farmers and traders.
Malawi’s Agricultural Commodity Exchange for Africa CEO, Mr. Kristian Moller, highlighted the significance of the agreement.
“It is great to sign this MOU today. We saw a specific case where Zimbabwe had excess wheat and Malawi had excess soybeans, and a swap made perfect sense. This led us to develop a modality for such trades. We then expanded the initiative to include ZAMACE and TMX, creating a unified framework for regional trade,” Mr Moller said.
Stakeholders believe the regional collaboration will significantly enhance market efficiency, improve price discovery, increase market liquidity, and create broader opportunities for farmers and traders.
Nedbank South Africa’s Head of Agricultural Commodities, Mr Zhann Meyer, emphasised the importance of cross-border trade for regional food security.
“The signing of this MOU is crucial for cross-regional trade. It demonstrates the region’s recognition of the importance of trade and food security, not just nationally, but regionally. I’m hopeful that this MOU will unlock trade barriers and enhance food security across the region.”
“This agreement addresses regional food security, which is paramount. We need to support each other through trade, and we are pleased to be moving in this direction and hope to attract investors to fund the procurement and trade of commodities like maize across borders,” Chairperson, Grain Millers Association, Mr Tafadzwa Musarara also added.
Zimbabwe’s Country Director and Representative for the WFP, Ms Barbara Clemens, praised the agreement for its focus on overcoming trade barriers.
“It is imperative to remove trade barriers to ensure the smooth movement of goods. This MOU is commendable, as it aims to pre-emptively address regulatory issues that impede trade, ensuring seamless transactions,” she said.
Integrated regional commodity markets have the potential to significantly contribute to food security, reduce price volatility, and promote cross-border trade in Eastern and Southern Africa.
