Low priced maize affecting EAX

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 Low priced maize affecting EAX

Competition from low priced and ungraded maize from the region have been singled out as major challenges the new East Africa’s first commodity exchange market is facing as it rolls out its services in the region.

“The commodity market is quite price sensitive,” he said before naming other challenges that have to be addressed both by the government and the commodity market managers if the region is to fully benefit from the nascent market.

Combined, the volume of both beans and maize handled at the commodity market has been growing, reaching 20,890 tons since June to December last year from 3,500 tons between January and May.
Besides the low priced maize, there also growing concern that poor quality maize continues to be dumped on the market, affecting the volumes of maize handled by EAX.
Through its automated trading system — NASDAQ OMX’s, the regional commodities market based in Kigali has helped local producers to benefit from high prices, creating new trade opportunities for the regional businesses.

For instance, the cost of maize at the East Africa commodity exchange, a weekly market report prepared by EAX, shows that the highest price of maize bid reached Rwf212 per kilogramme by the close of December.

Comparatively, other maize stores were quoting Rwf150 per kilogramme of maize.

To boost business at EAX and help farmers earn more, Dr.Kadri suggested that there is a need to educate co-operatives on standards, which form the bulk of the EAX market members.

“The co-operatives need to understand grain standards, warehouse receipts, structured trading and prices,” said DrKadri.
There is also a need to invest in grading and drying facilities, laboratories and quality staff in the country.

It was also noted that despite some banks like Bank Populaire Du Rwanda and Equity Banks agreeing to fund farmers who use stored grains in EAX warehouses as collateral, access to finance is still a major challenge to some farmers.The high prices of commodities at the exchange are expected as analysts say



About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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