ZIMBABWE-Zimbabwe Mercantile Exchange (ZMX), a sustainable marketing firm in commodity exchange, has been appointed to aid the Grain Marketing Board (GMB) in the management of the country’s Strategic Grain Reserve (SGR).
Established in 1931, GMB is the country’s leading grain trade and Marketing Company responsible to accord local grain producers a fair share of the local and export markets and also providing them with a guaranteed outlet for their excess grains.
As the sole trader of controlled declared food grains as per statutory instruments (SI), GMB is mandated to purchase controlled commodities at gazetted producer prices and sell them at prescribed selling prices.
The GMB is mandated to hold financial resources equivalent to 500 000 tonnes of maize and 450 000 tonnes of grain in the form of a national SGR.
However, the government entity is facing a food price dilemma and pressure to ensure maize producers get higher prices for their crops and millet prices are affordable.
To cope with the constraints, the government opted for a sustainable trading platform that must be adopted by all players, maintain all grades, and be cost-effective and transparent hence ZMX comes to the fore.
ZMX is a private entity with shares held by the government. It has handled over 220 000 tonnes of grain since its launch with warehouse receipts issued mainly on maize.
According to Professor Mathuli Ncube, Minister of Finance and Economic Development, a direct marketing regime advanced by the GMBs have limited the role of private players in this sector.
He further remarked that the role of GMB can be enhanced through a partnership with private players in the sector in line with GMB’s strategic functions of price stabilization, food security, and grain storage.
The move by the government to outsource grain reserve management was driven by collapsing opportunities for the local maize market, high market prices, and import restrictions as well as alleviating high treasury budgets on maize reserves.
In addition, the private sector could not access commercial financial markets as they were crowded out by the government borrowing money from the domestic market by issuing treasury bills and other instruments to finance purchases related to maize by the GMB.