(MENAFN- Daily News Egypt) The Egyptian commodities Exchange Company has been launched as part of the state's plan to develop internal trade, according to Minister of Supply and Internal Trade Aly Meselhi.
Meselhi said the commodity exchange will provide protection measures to small farmers and producers by collecting their products and classifying them, before making them available to dealers on the exchange platform.
It is expected that the organised market will contribute to increasing the competitiveness of small farmers and producers. The minister pointed out that the commodity exchange is part of Egypt's internal trade system infrastructure, and will encourage the entry of small traders to the organised trade system.
It is hoped that the improved system will be reflected in commodity prices that will benefit the consumer and the producer, especially while reducing circulation.
The Egyptian Commodity Exchange Company has been launched with a capital of EGP 91m distributed on the Egyptian Exchange (EGX), the Internal Trade Development Authority (ITDA), the Egyptian Holding Company for Silos and Storage (EHCSS), and the General Authority for Supply Commodities (GASC). A number of commercial and investment banks, the Misr Holding Company for Insurance, and the Misr for Central Clearing, Depository and Registry (MCDR) are also involved.
The company's Constituent Assembly has held its first meeting, which saw discussions take place on the measures required for its speedy activation. This will ensure that an organised market is created in which trading in some of the present, storable commodities takes place.
To clarify, Egyptian Commodity Exchange Company Chairperson Ibrahim Ashmawy said that his company will establish an organised market for trading "presentable" commodities. It will also manage processing warehouses, in addition to contracting with existing licensed stores, and establish and manage grain silos and cold rooms.
Ashmawy added that the commodity exchange aims to reduce the circulation of commodities between farmers and producers to reach the hands of the consumer. The seller, whether they are a farmer, trader or a producer, can deposit the goods inside the stores approved by the Ministry of Supply and Internal Trade after they have been classified. With these protocols in place, there will be a degree of quality provided for the products to be traded directly on the platform.
The electronic stock exchange displays the available quantities of each commodity on EGX screens, which will control the supply and demand between the seller and the buyer. This will in turn determine the price of those commodities in the consumer's favour, which will reflect positively on commodity and product prices.
It is also scheduled to start offering a number of basic products on the commodity exchange, such as wheat, oil, sugar, and rice, as part of the first stage in the first and second quarters of 2021.
EGX Chairperson Mohamed Farid noted that the Egyptian Commodities Exchange is a regulated market for trading in the present available Egyptian commodities that can be stored. It brings parties together to the trading process, including traders, stores, sellers and buyers.
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