A commodities exchange for wheat, oils, sugar and rice is being set up in Egypt, Reuters reported on 9 September.
The exchange would provide protection for small farmers and producers and make their stocks available to the wider market, the supply ministry in Egypt was quoted as saying.
Chaired by Ibrahim Ashmawy, the current head of the internal trade development authority, the exchange would have 91M Egyptian pounds (US$5.78M) in capital.
Farmers, traders and producers could deposit their stocks in any of the supply ministry’s certified storage facilities where they would be evaluated and graded, then directly traded on the electronic platform, Ashmawy was reported as saying.
Supply and demand would then determine the price of these commodities for the consumer, he added.
The announcement had taken traders and market sources by surprise, Reuters said, and they were unsure how the exchange would operate in practice due to the fact the government traditionally priced the strategic commodities it bought from farmers.
“It is strange that they did not choose to start with crops that are widely grown in Egypt privately by farmers such as citrus,” a Middle East commodities expert, who declined to be named, was quoted as saying.
Initially trading in wheat, oils, sugar and rice beginning in the first half of 2021, the exchange could also allow for developing options and futures contracts for the commodities on offer at a later stage, the supply ministry said.