Early this month, the East Africa Exchange (EAX) successfully traded in one session all of the 578 MTs of MINAGRI maize it has kept for over five years through its electronic trading platform.
The trading session attracted more than seven commodity buyers who offered bid prices against MINAGRI, the sole seller. The quoted price was Rwf 100 per kg, however, buyers made higher bids and the grains were finally sold at the highest bid of Rwf 147per Kg, almost 50% more!
“We are very excited about the success of this trade as it demonstrates the value addition of a Commodity Exchange, which provides opportunities for buyers and sellers to interact, and to discover real prices based on their perception of value. This trade was carried out in a transparent and fair manner, which is what EAX stands for, Dr Kadri Alfah said.
The EAX was formed to link smallholder farmers to commodity markets to ensure that they get good prices for their commodities based on price discovery. “EAX has the ability to draw trusting market participants together to trade and give sellers what they deserve in the form of higher prices.”
In an unstructured market, it would be difficult to trade these grains because you will have several buyers who do not necessarily want the grains but are there just to distract real buyers’’ Dr Kadri Said. We hope to trade more grains on behalf of MINAGRI, he added.