Preparations for Commodity Exchange Market in full gear

By By Felix Lazaro The Citizen Reporter

In Summary

The Capital Markets and Securities Authority (CMSA) said in a statement yesterday that it would conduct training for three weeks for traders and intermediaries of the market starting next month.

Dar es Salaam. Preparations for the anticipated Commodities Exchange Market are at an advanced stage.

The Capital Markets and Securities Authority (CMSA) said in a statement yesterday that it would conduct training for three weeks for traders and intermediaries of the market starting next month.

The training and certification of commodity exchange intermediaries are among requirements for a member to be licensed, the statement said.

“We hope to launch the Commodity Exchange Market before the end of this year,” CMSA spokesman Charles Shirima said over phone.

CMSA has identified the location for the warehouse. The current sitting of Parliament is expected to amend the law to accommodate the market which will include agricultural produce.

The commodity exchange, according to CMSA, provides price transparency, price discovery and reduced transaction costs.

Tanzania has been implementing several changes in the rules to deepen the capital market which so far only about 200,000 participate.

It scrapped restrictions on foreigners owning more than 60 per cent of companies that trade on the Dar es Salaam Stock Exchange (DSE) and allowed investors from the East African Community to buy as much as 40 per cent of the government securities.

In 2012, the Enterprise Growth Market was set up for mid-sized companies to list on the DSE.

The regulator is also talking with some cities to raise capital for development expenditure through municipal bonds.

The regulator hopes the training will help market players and professionals to keep pace with the market demands in delivering services and promoting professionalism and expertise in the commodity exchange business.

Targeted personals include commodity exchange companies, banks and financial institutions, firms in commodity supply chain, crop industry bodies, brokerage companies, policy makers, students and commodity research analysts.

The regulator’s effort is worth undertaking given the current development of the preparations for the system to operate in Tanzania like legal and policy requirements.

Finished processes include establishment of a company namely Tanzania Mercantile Exchange and preparation of legal proposals to incorporate the online crop marketing platform into the country’s economy.

“Under the commodity market, most agricultural produce will access local and international markets, leading to increases in agricultural earnings to farmers and subsequent investments in the processing industries for value addition,” he said.