Egypt wants its commodity exchange this year

Egypt, a major agricultural and economic power on the continent, is expected to launch its agricultural commodities exchange this year. A project that is constantly being discussed and that could (finally) succeed.

The head of the Egyptian Internal Trade Development Authority, Ibrahim Ashmawy, confirmed on Thursday 9 January the creation « within the next 36 to 48 weeks » of an exchange platform dedicated to agricultural raw materials. The new exchange, like what is already being done in some African countries (South Africa, Ethiopia, Ghana, Rwanda…), should enable farmers to do without intermediaries and to have transparent prices, while offering secure storage of harvests. As for the first negotiable products, they should, according to the Egyptian official mentioned above, primarily concern wheat, sugar, maize and rice.

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The value of the announcement, however, lies more in the formulation of an indicative deadline than in the actual mention of the launch of this new trading place, the project being regularly discussed since 2014. In 2016, the former Minister of Supply and Internal Trade, Khaled Hanafi, thus indicated that he wanted to create « the first commodity exchange in Egypt and the Middle East » which, in addition to agricultural products, would also list oil and gold. However, the announcement never materialized, many observers believed at the time that the project was too vague and lacked real political will to be realized. By this measure, the new initiative already appears to be more successful than previous attempts. As early as October, the Cairo Stock Exchange indicated that it would soon form a joint venture with the Ministry of Supply to run an entity dedicated to trading agricultural products on the spot market. It is now known who the final shareholders of the new commodity exchange will be: in addition to the Cairo Stock Exchange, which will act as the main technical partner, the General Supply Commodity Authority (GASC), the Internal Trade Development Authority (ITDA) and the Egyptian Holding Company for Silos and Storage will join forces to finally get this project off the ground. To be continued…