Commodity exchange in pipeline

Plans to set up the first commodity market in the East Africa Community (EAC) has made a good progress after registering a company and identifying a trading house.

The journey, which started two years ago, is basically awaiting passing of the law and regulations, training, testing and licensing of dealers - the process to be finalised next year.

The Capital Markets and Securities Authority (CMSA) Chief Executive Officer, Ms Nasama Massinda (pictured), said the Tanzania Commodity Exchange Market Company Ltd was incorporated three months ago.

“Basically we have made great strides toward the establishment of the commodity market,” Ms Massinda said, ‘We have registered a company and identified a trading house.”

She said the trading office will be housed at Local Authorities Pension Fund (LAPF) building in Kijitonyama along New Bagamoyo Road.

The CEO said they have secured funds from the World Bank to train dealers/brokers and the process will start soon. After the training the dealers/brokers will undergo some testing prior to licensing them.

“We have also secured funds for public education and awareness programmes from World Bank,” Ms Massinda said yesterday during a press conference after listing of Mkombozi Commercial Bank on the Dar es Salaam Stock Exchange (DSE).

The CMSA is working on technical aspects of the market that is designed to boost Kilimo Kwanza (Agriculture First) initiative.

The Ministry of Agriculture, Food Security and Cooperatives and Ministry of Trade and Industry are working on commodity and quality aspects, respectively.

The CMSA boss said though the trading systems and regulations of commodity exchange are almost similar to equity market but some specific law and regulations have to be legislated for the new market.

According to CMSA, the commodity exchange will initially trade in four crops - cashew nut, coffee, cotton and rice. Currently, the four crops are being traded under the warehouse receipt system.

The exchange is designed, among other things, to include a trading floor, warehouse delivery locations and price tickers. Experts in agro-business have it that the exchange is designed to liberate farmers by exposing them to reliable market environments locally and abroad.

President Jakaya Kikwete, the pioneer of the commodity market, said after visiting Ethiopian Commodity Exchange (ECX) in 2013 that the exchange would provide a marketplace where buyers and sellers meet to trade and be assured of quality, delivery and payment.

A special committee headed by the Permanent Secretary in the Prime Minister’s Office was set up last year to fast-track the matter and it was initially planned to be in operation in June 2015.
Source: Daily News, reported by Abduel Elinaza from Dar es Salaam, Tanzania
Share on Google Plus

About Abduel Elinaza

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.