Chisamba, Zambia, April 03, 2016 --(PR.com
)-- “This is a very exciting time for the Zambian agricultural community and the opportunities to market and manage price risk of grain have been expanded for all. I trust we are finally in a position to offer the Zambian community a full range of exchange products,” says Chris Sturgess, Director: Commodities & Key Client Management, Johannesburg Stock Exchange. He explains: “Through the Zambian Commodity Exchange (ZAMACE) we have the ability to license warehouses according to the Zambian Agricultural Credits Act and will soon be able to provide a spot exchange for price discovery on the day and with the JSE through our clearing house. This will offer guaranteed derivatives trading and clearing for market participants to manage future price risk.”
During the upcoming Agritech Expo, which will be held in the Zambian agri-hub of Chisamba from 14-16 April, the JSE will be sponsoring the Commercial Farmers Focus Day workshop and Sturgess will address attendees on "price risk management tools for the Zambian grain market."
Some 15 000 farming professionals, from emerging, to small holder, to commercial farmers, to agri experts, along with 130 exhibitors, are expected at the third annual Agritech Expo, which is owned by the Zambia National Farmers Union. Last year’s VIP visitors included Zambian President Edgar Lungu, the Vice President, Mrs Inonge Wina, as well as the Zambian and German Agriculture Ministers.
Optimistic about Zambia’s agricultural future
Sturgess says he is very optimistic about the future of agriculture in Zambia: “It is true that we require consistent Government policy to build a futures market, but the opportunity for Zambia to go from a 3 to 4 million ton grain-producing nation to a 10 million ton grain-production country will be the true test to decide whether we have succeeded in building the sector. The world needs food and Zambia has the potential to make it happen.”
Sturgess says his advice to Zambian commercial farmers is simple: “Futures and options may sound complicated, but you should use every opportunity to learn more about these well-established products that will expand your marketing opportunities and remove price risk from your business. Sign up with a broker who can provide you with access to the JSE derivatives market and start hedging. Be sure to start off small and that you understand the difference between hedging and speculating on the market to gradually build your own confidence in these new instruments.”
SA commodity derivatives market well recognised
According to Sturgess, the South African commodity derivatives market is well recognised as a success story, following the deregulation of the agricultural markets in the mid-1990s. He adds: “It was due to consistent application of Government policy to support the free market, and the fact that we had an already large production base of agricultural commodities to trade, a solid banking sector to assist with settlement and the commitment of members who went out and educated the client base from farmers to millers, on how to use futures and options to manage price risk. Globally the South African derivatives market ranks in the top 15 derivative exchanges according to FIA rankings.”
The full interview with Chris Sturgess can be accessed on the event website.
Agritech Expo is organised by Spintelligent, leading Cape Town-based trade exhibition and conference organiser, and the African office of Clarion Events Ltd, based in the UK.
The Johannesburg Stock Exchange is based in South Africa where it has operated as a market place for the trading of financial products for 125 years. It connects buyers and sellers in equity, derivative and debt markets. The JSE is one of the top 20 exchanges in the world in terms of market capitalisation and is a member of the World Federation of Exchanges (WFE) and Association of Futures Markets (AFM). The JSE offers a fully electronic, efficient, secure market with world class regulation, trading and clearing systems, settlement assurance and risk management.
ZAMACE is a private limited liability company incorporated under the Companies Act in 2007 and operates Zambia’s sole commodities exchange. ZAMACE was created with a view to offering the following services to the agricultural sector in Zambia: A spot trading platform offering price discovery, standardised contracts and processes and guaranteed settlement; A set of industry-recognised grades and standards for the main traded commodities; Warehouse inspection and certification services, facilitating the development of a warehouse receipt system in Zambia to support the standardised trading platform and to facilitate asset-backed financing in the agricultural sector.
ZAMACE has now positioned itself to offer an agricultural futures market for Zambian commodities in association with the Johannesburg Stock Exchange.
Agritech Expo dates and location:
14 -16 April 2016
Gart Research Centre, Chisamba, Zambia