Two government ministries have encouraged farmers to sell their produce through commodity exchanges to earn better prices and have access to finance using their produce as collateral.
In a joint statement issued yesterday, Ministry of Agriculture, Irrigation and Water Development and Ministry of Industry, Trade and Tourism said it is important for farmers to sell their produce using structured market systems such as commodity exchanges and patronise warehouse receipt services offered by such market platforms.
Malawi has two commodity exchanges: Africa Commodities Exchange (ACE) and AHL Commodities Exchange (AHCX) operating from Lilongwe.
In the statement, government also announced other measures aimed at bringing sanity in the produce market, including the requirement for all buyers of agricultural produce to obtain permits from Ministry of Agriculture, Irrigation and Water Development in line with the Agricultural General Purposes Act 1987.
Commenting on the joint statement, AHCX communications manager Thom Khanje said it was pleasing to note that government is encouraging farmers to use the commodity exchange in the selling of their produce.
He said the organised platform protects farmers from exploitation by unscrupulous entrepreneurs.
Said Khanje: “By selling commodities through the commodities exchange, farmers get the best prices prevailing on the market as registered buyers compete openly on the market through an open outcry system that ensures that commodities are bought at a price acceptable to both the buyer and the seller through a competitive and transparent system.”
He said through the commodities exchange, farmers are also able to get loans from banks where their produce has not been bought immediately at the exchange.
AHCX is touted as the country’s biggest commodity exchange with 17 warehouses spread nationwide at Lufita in Chitipa, Karonga Agricultural Development and Marketing Corporation (Admarc) compound, Bwengu in Rumphi, Mzuzu Admarc, Jenda in Mzimba, Kasungu Boma, Chatoloma in Kasungu, Mponela Admarc in Dowa, Ntchisi Boma, Matutu in Mchinji, Chilambula in Lilongwe, Chimbiya in Dedza, Balaka Admarc, Limbe AHL complex, Luchenza in Thyolo, Muloza in Mulanje and Namwera in Mangochi. n