Auction Holdings Commodity Exchange Limited (AHCX) head of operations Davis Manyenje said with appropriate policy support, commodities other than tobacco have the potential to rake in over $1 billion per annum in export revenues. He stated if the earnings are combined with those from tobacco, they could significantly impact on the country’s foreign exchange potential.
Speaking to Business News recently, Manyenje said government must formulate proper guidelines that will help each and every farmer to sell their crop through a well structured market because that is when the country can know how much it is benefitting from its crops.
“Most of our crops are not going through the properly structured markets. We know this is a liberalised economy but other vendors have taken advantage of the situation and are exporting crops like groundnuts, beans and rice and the country is losing a lot,” said Manyenje.
He said any farmer looking to benefit from their sweat needs to understand the importance of efficient price discovery.
“We did our research and what we discovered is very encouraging. With appropriate support from government this country can rake in billions of kwachas if we export other crops in large quantities. If that can be combined with the tobacco proceeds then we will deal with some of the problems that arise due to lack of forex,” said Manyenje.
But efforts to talk to Principal Secretary in the Ministry of Agriculture Jeff Luhanga on why the policies are not being implemented to bring sanity in the agricultural sector production proved futile as he did not pick up his phone.
Manyenje, however, added that It is no longer attainable that farmers should continue to be on the receiving end and always be price takers, when every other seller of items sets the price of their commodities.
Uniquely, AHCX ensures that both the seller and the buyer walk away happy having negotiated an amicable price for the commodities
Manyenje revealed that his organisation has intensified efforts to work with stakeholders on the grass roots as well as helping farmers set up cooperatives because they can be easily reached with information.
Added Manyenje,”We have intensified our efforts working with several stakeholders at the grass roots level promoting awareness of the market among farmers as well as promoting the setting up of cooperatives and farmer clusters for efficiencies. There is a lot that has to be done to ensure that farmers across the country know about the availability of this exciting market structure and its striking benefits.”
He added that AHCX focus for 2014 is to cement the growing confidence of the local farmers and traders with an aim of increasing their participation.
“We intend to harness our experience, technical competencies as well as the growing confidence on the demand side, to provide a robust market of choice for farmers and traders on the supply side as well as domestic processors and exporters while meeting the demand of the foreign importers,” said Manyenje.
He hinted that AHCX intends to expand the scope of its interface with stakeholders including financial institutions, commodities grading companies, logistics companies, fumigation service providers and other service providers to ensure a seamless trade facilitation so that everybody benefits.
According to Manyenje, the commodities space has potential to create jobs and new supporting business opportunities if well structured as there are several support services.
“We will give reason to the farmers to expand their production, reason to financiers to support producers of other commodities not only tobacco, reason to service providers to support other commodities traders as well as enhance the profile of agriculture in general for Malawi by providing a robust, technologically advanced and competitive market environment at AHCX,” concluded Manyenje.
AHL Commodities Exchange Limited, a subsidiary of Auction Holdings Limited has been in operation for less than a year.