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  • Tanzania: Commodities Exchange Ready for Rollout Next July

    May 9th, 2016

    Tanzania Mercantile Exchange (TCX) is set to start operations in the next fiscal year after tackling some issues related to warehouse receipt. TCX is expected to start with cashew nut whose marketing season is between September and January. The cash crop was chosen, thanks to its warehouse receipt system already in place. Capital Markets and Securities Authority (CMSA) Public Relations Manager Charles Shirima said in Dar es Salaam over the weekend that currently experts are doing gap analysis study to ascertain the challenges that affected the warehouse systems prior to a sensitisation campaign for the launch of exchange.

    The team, comprising CMSA experts, has visited the cashew growing areas in Lindi, Mtwara and Morogoro to get first-hand information on the challenges engulfing warehousing system. "We plan to visit the same areas next time and work out the solution for the challenges... we see no reason of introducing a new product while farmers are complaining about the warehouse system," Mr Shirima said. CMSA had earlier announced that the exchange will kick-off this month but it has pushed back the launching date, pending the study. The preparations, including the regulations to guide the market operations, were going on well.

    Other crops expected in the exchange after perfecting the cashew nut trading are coffee, sesame, rice, sunflower and probably maize currently traded under warehouse receipt system. The commodity exchange is a central place where sellers and buyers meet to transact in an orderly and organised fashion, with clearly specified and transparent rules. The government backs commodity exchange as an answer to market challenges. Already CMSA has trained and licensed some 60 commodity dealers. Experts on commodities exchange believe that the country has supportive infrastructure for the TCX's establishment.

    The infrastructure includes the warehouse receipts system and its supporting licensing law, interbank payment and Dar es Salaam Stock Exchange's stock settling that are the key components for an efficient TCX's management. The Parliament passed the bill for the establishment of the TCX after amending the CMSA law of 1994 to become Capital Markets and Commodities Exchange Act.


    Source: www.allafrica.com