Committee Meetings on Development of Commodities Exchanges
The SEC.COMEX Ecosystem Committee has been actively discussing the history and development of commodities exchanges, focusing on stakeholders, infrastructural gaps, and market players. Key observations include the importance of smallholder farmers, warehousing integrity, and government involvement. Next steps involve engaging with crucial government agencies to enhance the exchange's restructuring and positioning strategy.
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Presentation Transcript
Update Meetings Deliberations History and development of commodities exchanges Current operating environment The Committee met five times since the last CMC meeting Building blocks of commodities exchanges Stakeholders Disaggregation of the Value Chain: The committee deliberated on all the players and market infrastructure in the value chain, identifying the gaps and methods to bridge them Electronic warehouse receipt Physical infrastructure Government policies Grading and certification i) Logistics ii)Storage facilities Electronic trading platform Clearing and settlement Settlement guarantee fund Market participants
Update Key Observations Smallholder Farmer The farmers are the core of the exchange as they are directly impacted by its in operationality On board them by providing remote access sites with access to prices in a transparent form Grouping into cooperatives to provide ease of access to finance and other services Smallholder Farmers Warehousing This forms the foundation for trading physical commodities and also lays the structure for derivatives trading Warehousing Adequate structure needs to be developed to ensure its integrity Collateral managers, assayers, etc. to be registered and recognized by the exchange Government Although government is key in developing the exchange, its role is to be limited to providing infrastructure required to drive it with little to no interference in its operations Government Incentivize players to trade on the exchange Mandate procurement of commodities in all its agencies via the exchange
Next Steps The committee, at its last meeting, agreed that it will be necessary to meet with paramount existing government agencies in the commodities value chain The meeting will enhance its understanding of the roles and responsibilities of these agencies This will aid in proffering sound solutions on the restructuring required to appropriately position the exchange Nigeria Incentive- based Risk-sharing for Agricultural Lending (NIRSAL) Federal Ministry of Solid Minerals Development Bank of Agriculture (BOA)
