The Egyptian Commodity Exchange (EGX) for wheat, corn, rice and sugar will be operated by January 2021: Solving difficulties in selling agricultural products for the farmer of Egypt.
Egypt will operate EGX in January 2021. It initially offer trading of only four agricultural commodities which are wheat, corn, rice and sugar. These are spot commodities that are large in volume and can be stored for long periods.
On January 22, 2020, the Egyptian Prime Minister, Dr. Mostafa Madbouly, authorized EGX and a number of relevant agencies to establish a joint stock company to operate this e-commerce platform. About 6.3 million USD of capital will be allocated to operate the platform. The company’s board of directors will be made up of stakeholders with the Egyptian Government holding 51% of the shares and the remaining 49% belongs to private stakeholders. Public and private investors include 3 major state banks (The Misr Bank, The National Bank of Egypt and The Agricultural Bank), EGX, The Ministry of Supply and Internal Trade, The IC Capital, The Hermes Financial Group, The Misr Insurance Holding Company, The Misr Authority for Central Clearing, Depository and Registry, and The Federation of Egyptian Chambers of Commerce.
With a commitment to reduce risks, attract traders, promote trading volume, value and transaction efficiency. This company will be responsible for all tasks related to an e-commerce infrastructure management system, pricing mechanism, quotation, control and risk management system. Trading agricultural products on the platform is connected with logistics centers, purchasing centers, warehouses to identify commodity supply and demand and ensure a more efficient value/supply chain.
The aim of creating a well organized market for agricultural products is to ensure fair, clear and transparent pricing, reduce intermediary costs and avoid monopoly. On the basis of such a platform, there is sufficient market data to ensure the marketability for both smallholder farmers.
- Reduce costs of production, logistics and storage by 20%; while reducing losses and wastes in the value chain;
- Farmers have the opportunity to access transparent information, self-knowing the pricing of their products and thereby enhance product quality and marketability;
- Policy makers improve the assessment, approach and elimination many of the bottlenecks across the value chain;
- Logistics, purchasing and storage centers are linked and gradually make the informal trading sector become an official hub with the centers more qualified.
- All of the above results will increase trade efficiency and overall branding, bringing higher incomes for small scale farmers, types of businesses and consumers, indirectly affecting the improvement of agricultural product quality, creating ideas and innovations across the food value chain, thus attracting new investment in the field of agricultural production and processing for export.
Dr. Quang Minh Bui