News | Ghana Commodity Exchange

GHANA COMMODITY EXCHANGE PREPARES TO INTRODUCE NEW COMMODITIES FOR TRADE

Date : 13th Feb, 2019


GHANA COMMODITY EXCHANGE PREPARES TO INTRODUCE NEW COMMODITIES FOR TRADE image


GHANA COMMODITY EXCHANGE PREPARES TO INTRODUCE NEW COMMODITIES FOR TRADE

The Ghana Commodity Exchange (GCX) has announced its plan to expand its current traded contracts of White and Yellow Maize to include Soya, Paddy Rice, Sorghum and Sesame this year. In view of this, GCX organised a soybean consultative meeting with stakeholders with the support of International Finance Cooperation (IFC) on the 7th of February, 2019. Present at this meeting were players in the soya industry; buyers, sellers, processors, financial institutions and regulator (SEC).

The Exchange plans to start trading Soya in the second quarter of the year; this will be another stepping stone towards fulfilling its vision to transform Ghana’s economy by creating prosperity for all in commodity value chains and become a regional and global trading hub for all commodities.

A pertinent agenda item at the meeting was the discussion of the soya contract; a commodity contract refers to the terms under which a commodity is traded. The terms discussed include; soya standards, trading parameters, quality assurance, grading, packaging, delivery centres, etc.

The trading of Soybean and the other crops on the Exchange’s platform will help to boost revenue as well as support more Ghanaian farmers with secured storage, post-harvest loss management, warehouse receipts, warehouse receipts financing, and access to markets in Ghana and within ECOWAS for these crops. The move is also expected to develop the soya industry further for farmers and other stakeholders in the value chain.

The Ghana Commodity Exchange is a regulated market that links smallholder farmers to commodity markets in Ghana, Sub-Saharan Africa, and ultimately globally. The Exchange commenced trading in Maize contracts in November 2018 and trades electronically. Currently GCX engages in spot trading, meaning that transactions are carried out and settlement is done immediately. Within a few years, forwards and futures contracts, where transactions are carried out, but settlement done in the future, will be added to the portfolio of products.

GCX operates by having farmers deposit their commodities in GCX certified warehouses where they are standardized in terms of grades & weights and a warehouse receipt issued to the owner to show ownership. This warehouse receipt can be traded within three months. Alternatively, it could be used as sole collateral for a short-term (1-3 months) loan which enables owners to have quick access to cash whilst allowing them time to attain the best price for their commodity. Through GCX’s world class trading platform, buyers and sellers of commodities meet to agree on prices and cash settlement is effected within 24 hours of trade whilst the commodity can be collected anytime within 10 days of the trade.

The Deputy CEO of GCX has stated that the inclusion of sesame seed and soybean will encourage more production of the crops. GCX will continue to expand its product range to include many more commodities and increase the scale of the benefits the Exchange provides.