Zambian farmers should think about planting soya beans for the coming season, says Jacob Mwale of the Zambian Commodity Exchange (ZAMACE).
“There is an already existing market in South Africa. South Africa has to import from offshore countries like Argentina and Brazil. It’s the question of whether Zambia is competitive,” Mwale told Africanfarming.com during the Regional Network of Agricultural Policy Research Institutes’ (ReNAPRI) stakeholder conference currently underway in Cape Town.
He added that Zambian farmers will have to work harder on their efficiency per production unit and said that ZAMACE is also considering creating a product for white sorghum contracts. His advice is that farmers should also consider planting white sorghum and sunflower for the coming season as local and international markets are already in place for these grains.
ZAMACE rolled out the first grain futures contracts for Zambian farmers at the beginning of the year in collaboration with the Johannesburg Stock Exchange (JSE).
According to Antony Chapoto, Research director of the Indaba Agricultural Research Policy Institute (IAPRI) in Zambia, Zambian farmers are slow to take up the exchange instrument due to government intervention in grain buying and farmers selling their harvest directly to buyers, as compared to the highly commercialised trade taking place in South Africa.
Also read: Soya bean price in Zambia rising
AGRICULTURAL TRADE INVESTMENT INSTRUMENT
He said instruments like warehouse receipts and grain contracts would enable agriculture in Zambia to move forward. “This will give a more structured operating system where the value chain is talking to each other.”
Mwale explains that farmers can use warehouse receipts to re-invest and access funds since they can be used as collateral. He added that these instruments allow the farmers to lock in delivery mechanisms for other pre-trade financing.
His advice to farmers is to engage with ZAMACE to ensure they are ready for the coming trading season when they start to harvest. “They can engage with us so they can know which products will be viable, or which products we can arrange for their supply etc. They can also use our platform to indicate what they want to deliver, or they can test to see what the markets are offering.”
He said there has also been international interest from the bidding side, and he hopes the process will get more traction when more buyers enter the market.
Also read:
Your guide to ZAMACE grain future contracts
Zambian farmers enter futures market
Government urges maize farmers to use ZAMACE
Modern warehouses to unlock Zambia’s maize futures market – expert
