The Tanzanian Capital Markets and Securities Authority (CMSA) has recently announced in a press conference in Dar es Salaam that the first Tanzania Commodity Exchange Market (TCX) will start operations in May, 2016, after the Parliament’s approval and preparation of regulations that are in final stages.
The TCX seeks to boost Tanzania’s agricultural sector by helping local farmers to place their products in the local and international markets to raise agricultural earnings, which are meant to be invested in the processing industries to add value to the final product.
According to the CMSA, the TCX will initially trade in six crops called cashew nuts, coffee, sesame, rice, sunflower seeds and probably maize. It has been already registered under the name Tanzania Commodity Exchange Market Company Ltd and the trading floor will be located at the LAPF building in Kijitonyama from Kinondoni Disctrict, Dar es Salaam.
In addition, the TCX will provide price transparency and discovery while reducing transaction costs to help setting competitive spot prices and foment the supply and demand.
Some companies have already shown interest on trading at the TCX but they have not been awarded yet with the right licenses, therefore, those wishing to trade as commodity dealers are invited to register at the CMSA to be able to start operations in May, 2016, explained CMSA Public Relations Manager, Mr. Charles Shirima.
According to India’s Stalwart Management Consultancy Services’ Director, Dr. Bharat Kulkarni, whom in cooperation with the United Nations helped to establish the first Commodities Exchange in East Africa in 2008, Tanzania counts with supportive infrastructure for the TCX’s establishment.
The infrastructure includes warehouse receipts system and its supporting licensing law, interbank payment and DSE’s stock settling that are the key components for an efficient TCX’s management, Dr. Kulkarni added.
Dr. Kulkarni helped to establish the Ethiopia Commodity Exchange (ECX) which was the first of its kind in Africa and through the creation of a new marketplace that serves from farmers to final consumers, has created an important growth in Ethiopia’s commodity sector and linked industries as transport, logistics, banking and general financial services according to ECX’ website.