AHCX: A STRUCTURED AND ORGANIZED COMMODITY MARKET LAUNCHED IN MALAWI

Malawi is an agricultural economy that is dominated by smallholder farming, which accounts for a bulk of production. Under the policy of liberalized commodity marketing, farmers and traders sell and buy produce in the rural areas without regulations that has disadvantaged farmers in many years. The only structured market is for tobacco under Auction Holdings Limited (AHL).

AHL has invested MK4.0 Billion to establish AHL Commodities Exchange (AHCX), a market for all commodities, other than tobacco. Her Excellency President Dr. Joyce Banda on Thursday 17 October officially launched AHL Commodities Exchange (AHCX), the first national level commodity exchange with integrated and organized infrastructure for commodities trading in Malawi.
Speaking at the launch President Banda congratulated AHL and the participating companies for sharing a vision of delivering an innovative idea that will promote Malawi’s agriculture and trade sector. Banda praised the establishment of AHCX as timely, noting that it will “help small farmers in accessing a reliable market.”
Furthermore, the President pointed out that trade and agriculture growth in the country will require Government in partnership with the Private Sector to formulate creative growth and development strategies. She also assured the gathering that her government will speed up the tabling of bills in parliament that encompass commodity exchange business.

During the Launch President Banda was taken through some pavilions and the Trading floor that showcased how AHCX operates.
Speaking earlier, AHL Board chairperson Dr. Jerry Jana said that AHCX is a critical tool in connecting local farmers and traders with potential investors and partners, locally, regionally and internationally. “Auction Holdings Limited decided to invest in the establishment of this competitive, transparent and organized market for all Agricultural Crops in Malawi, just like it has successfully done with tobacco for close to eighty years now.”

So far, agricultural commodities such as Maize, Groundnuts, and Soya beans are being traded.
AHL Commodities Exchange’s Presidential launch follows after a successful business launch conducted on 18th July, 2013 at Crossroads Hotel in Lilongwe where the Chairman of AHCX Dr. Evance Matabwa said that AHCX has come to set the terms of trade for our Agricultural Commodities, terms that will translate to an economic revolution for the country. He further highlighted that Malawi is coming from a background where Agricultural produce disappeared out of Malawi much without an appropriate identity, and with very little to account for as revenue for the country. Global players in commodities did not know where to start from to access the wider base of Agricultural produce in Malawi. “We have every reason to celebrate the birth of AHL Commodities Exchange. Malawi’s agricultural capabilities will now be visible. This therefore is an opportunity to increase the country’s export base. Let us seize the moment. Let us do way with poverty” Dr. Evance Matabwa added.

As the first national level commodity exchange with integrated and organized infrastructure for commodities trading in Malawi, AHCX provides trade platform where buyers and sellers transact trade of commodities with assurance of quality, delivery and payment. It has operational warehouses in Karonga, Mzuzu, Kasungu, Mponela in Dowa, Chilambula in Lilongwe, Balaka, Limbe and Luchenza. More warehouses will be opened in all potential areas to assist farmers travel short distances when depositing their commodities. Soya, maize, Pigeon Peas, Rice, Sugar Beans and groundnuts are the crops currently being traded at the Exchange.

Malawian farmers will now be able to produce and trade huge quantities of good quality commodities with the rest of the world. This will bring substantial gains into the country’s economy, by creating opportunities in value addition, employment generation, property development and exponential growth in financial services and transportation just to mention a few. The collective diversified effort will also translate into a widening of the export base for Malawi and makes possible the realization of the Economic Recovery Plan (ERP) which is pivotal to the success of Malawi for growth and wealth creation in the national development agenda.

The trading system at AHL Commodities Exchange allows the farmers, sellers and merchants to have first hand information on prevailing prices and therefore it affords them an informed opportunity and an ability to value their commodities at any point in time and enables them to bargain for better prices which makes the AHL Commodities Exchange, a unique trading platform for Malawi. Auction Holdings Limited has so far spent about Ten Million Dollars during the past three years to put this facility together. The total project value is estimated to reach Fifteen Million Dollars when the Exchange will roll out its own purpose built warehousing facilities to support trading.

A Commodity Exchange is defined as an institution that determines and enforces rules and procedures for the trading of commodities and related investments such as commodity futures. AHCX is located along M1 road behind Puma Service Station (the old Metro Supermarket) in Lilongwe.