News | Ghana Commodity Exchange

THE GHANA COMMODITY EXCHANGE TO RING THE BELL FOR FIRST TRADE OF SOYA BEAN

Date : 26th Apr, 2019


THE GHANA COMMODITY EXCHANGE TO RING THE BELL FOR FIRST TRADE OF SOYA BEAN image


Ghana Commodity Exchange is launching soya trading in response to the growing interest in the crop from various producers, including smallholder farmers. The Exchange plans to introduce soya bean contracts of up to 1 MT each.

The Exchange is fulfilling its commitment to developing agricultural value chains in Ghana, in which soya bean prominently features. Ghanaian farmers now have access to an integrated marketing system which includes grading and standardization of the crop; therefore better placing them to meet the standards of buyers as well as discover prices that take their production cost into consideration. It is no secret that farmers understand the commercial nature of soybean, and if they can get better support to manage quality and access to market, they would consider cultivating the crop boosting their income and reducing poverty. Farmers in the Northern sector of Ghana, where the crop is widely grown, would be the winners here.

The GCX, the first ever commodity exchange in West Africa, started trading Yellow and White maize contracts in November 2018. The Exchange expects to boost its trading volumes and values with the launch of soya this month.

In preparation for the launch of soya trading, the Exchange undertook a comprehensive market analysis of soybean in Ghana and the viability of trading the commodity on its platform. This resulted in positive indications that soybean can be traded on spot contracts, whereby settlement is done immediately after the transaction is completed. Moreover, the commodity exchange regulator, Ghana Securities and Exchange Commission (SEC), has recently granted GCX the approval to trade soybean contracts on its platform upon satisfaction that the Exchange has undertaken intensive consultation with the soya industry and there are obvious benefits to the market actors and all risk addressed.

By trading with the Exchange, Ghanaian farmers would be supported with logistics and transport to deposit their commodities in GCX certified warehouses in Kumasi, Wa and Tamale. GCX warehouses are equipped with grain testing, grading and weighing equipment , all managed by professionally trained staff. Farmers would be given a warehouse receipt after screening their commodity for requirements set by Ghana Standards Authority for soya bean. The soya will then be weighed and rebagged for better market appeal and durability. Depending on market conditions, farmers can store their commodity for 3-6 months, in which time they will be linked to diverse range of buyers on the GCX electronic trading platform. Further, GCX has arranged with its partner banks, to provide short term loans to the farmers who do not have immediate market or are looking for better prices using the stored commodities as sole collateral for the loan. Interest rates could range from 0.5-1.5 per month depending on the bank involved and its agreement with GCX.

GCX is registered as a company limited by shares. The Government of Ghana provided the setup capital for the establishment of the Exchange so support farmers to access better markets and finance. The Exchange has over 94 members, and over 100,000 farmers, mostly smallholder farmers.

The Ghana Commodity Exchange is introducing this new crop in collaboration with other partners including Ministry of Agriculture (MOFA), Nation Buffer Stock Company (NAFCO), Ghana Standard Authority (GSA),and international development programmes including USAID, DFID, WFP, GIZ; all of whom have contributed enormous resources to improving soya value chains in Ghana.

The GCX launch of soya bean trading is a momentous occasion for all Ghanaians as one more step on the path towards revolutionising Ghana’s economy through agriculture and making Ghana the hub for agricultural trade in West Africa.