January 17, 2011

Zimbabwe sets up new grains exchange

Zimbabwe set up a commodities exchange on Friday (Jan 14), ending a government monopoly on grains and cereals trade to try to bring higher prices for farmers and support them to increase output.

Industry and Commerce Minister Welshman Ncube said the new Commodities Exchange in Zimbabwe (COMEZ), a partnership between the government and private investors, would initially trade grains and cereals and later expand to cover other commodities outside the agriculture sector.

"We want a situation where the smallest farmer of grains and cereals wherever located should be able to take advantage of the commodities exchange," Ncube said.

The southern African country has grappled since 2001 with food shortages that are often attributed to agricultural disruption caused by President Robert Mugabe's seizure of white-owned commercial farms for black resettlement.

The government abolished the only agriculture commodities exchange in 2001, decreeing the state Grain Marketing Board be the sole buyer and seller of grain and cereals. Farmers complained of poor prices and payment delays.

The Zimbabwe Agriculture Commodities Exchange traded commodities worth US$677 million in 2001 before it was abolished.

Since a political settlement between Mugabe and arch-rival Morgan Tsvangirai in 2009, Zimbabwe's farming has started to recover, with output of tobacco, a key export crop, doubling last year.

Corn production has also risen on the back of more support for farmers and the adoption of hard currencies.