Commodity exchange set-up process starts

Mwenge Food Market in Dar
The Bank of Tanzania (BoT) has started the process of establishing a commodity exchange in the country. The bank has called for bidders for consultants to provide legal and regulatory framework and design a robust trading system.

BoT said bidders have been given the task of "reviewing existing legal and regulatory framework for warehouse receipt system, cooperative and crop bodies and commodity trading."

The framework will pave the way for the opening the commodity exchange. The consultants should also conduct a comprehensive review of the current economic, financial and agricultural policies and conditions in the country while identifying opportunities and constraints.

"...conduct GAP analysis by comparing existing framework against international standards and EAC member countries," the statement reads.

GAP analysis determines the steps to be taken in moving from a current state to a desired future-state. BoT, to avoid starting at wrong foot, has also invited consultants to conduct a feasibility study that will design a robust trading system that suits the country conditions and link it with exchanges within the EAC bloc.

The deadline for submission of the request for expression is set for mid next month. The exchange, where farmers and buyers will meet, include a trading floor, warehouse delivery locations and price tickers, but before its establishment a number of issues concerning agro-sector need to be reviewed.

According to experts on agro-business the market is designed to liberate farmers by exposing them to reliable market environment locally and abroad.

President Jakaya Kikwete told the World Economic Forum (WEF) last May that the country intends to establish the Tanzania Commodity Exchange to provide a marketplace where buyers and sellers meet to trade and be assured of quality, delivery and payment.

It will initially trade in four commodities, namely cashew nut, coffee, cotton and rice. Currently, the four crops are being traded under the warehouse receipt system.
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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