AHL Commodities Exchange (AHCX) and Agricultural Commodity Exchange (ACE) on Friday signed a Memorandum of Understanding (MoU). The intention of the MoU is to allow cooperation in developing markets for grains and legumes in the country by the two commodity entities. According to AHCX general manager Davis Manyenje, the MoU has been necessitated by among other things, duplication of efforts in some areas while important spheres of the operating environment remained underdeveloped.
“As a consequence, the landscape remains predominantly in favor of informal trading. We want to accelerate the footprint of structured markets across the country and we want to reach out to those people who are still resistant to the idea of structured commodity markets,” he said.
On his part, ACE CEO Kristian Moller said with much informal trade in the agricultural markets, farmers sell their commodities at very unfair prices which has created an incoherent investment environment and movement of trade which are some of the areas that the partnership will work on. He said, “This will accelerate the structured trade in Malawi and benefit the development of agriculture in the country. We want to harmonize and bring transparency and accountability to the commodities market. Joining forces will create a win-win situation rather than both organisations duplicating efforts by investing in the same things.”
Areas of cooperation in the MoU include structured trade, financing/clearing house mechanisms, warehouse management, price information dissemination and joint auction for regional exchange interface.