(Updates with minister’s comments in sixth paragraph.)
Aug. 21 (Bloomberg) -- Zamace Ltd., a Zambian commodities exchange, plans to resume trading by May if the southern African nation’s government implements a law by year-end that has delayed the process, Executive Director Brian Tembo said.
Zamace, a 15-member bourse set up in 2007, provided a trading platform for crops such as wheat, soybeans and sunflowers as well as cement and fertilizer until it suspended operations in mid-2011. Zambia is southern Africa’s biggest corn producer after South Africa and Malawi. The exchange wanted to restart trade in products including corn and wheat last year, and had to postpone this until the law needed to certify commodity warehouses was in place.
“There is massive interest in this,” Tembo said yesterday in an interview in Lusaka, the capital. “Realistically, we are looking at the next agricultural marketing season, which starts from about April or May,” for trading to resume, he said.
Restarting trading will provide growers with transparent prices for products and make it easier to get financing to expand output, according to the Zambia National Farmers Union.
Robert Sichinga, who took over as agriculture minister in February, is studying the law, he said in a speech yesterday. He declined to comment on whether he might sign the warehouse receipt system law into place by the end of the year, speaking afterward by mobile phone from Livingstone.
“In order for us to ensure that to have effective legislation we have to have harmony” between different laws, Sichinga said. Having adequate storage warehouses will limit post-harvest crop losses, which have been as high as 42 percent, he said.
Delays in implementing the law required to start a warehouse receipt system has also delayed the start of trading of Zambian grains derivatives on the Johannesburg market, which it planned for March, according to Chris Sturgess, director of commodity derivatives at JSE Ltd. The bourse wrote to Sichinga this month asking him to implement the law, he said.
“It was a kind plea,” Sturgess said by phone from Johannesburg yesterday.
Zambia’s Food Reserve Agency will limit the amount of corn it buys from farmers this year to 500,000 metric tons, Sichinga said. This will make more available for private-sector buyers, which will boost trading on Zamace, Tembo said.
Zambia will harvest about 2.5 million tons of corn, the staple crop, this year. About 97 percent of that will come from small- and medium-scale farmers, according to their union.
--Editors: Ana Monteiro, Vernon Wessels