Farmers urged to use AHCX

The AHL Commodities Exchange (AHCX) has commended the Malawi government for advising farmers to use commodity exchanges in the selling of their crops as one way of fetching better prices as well as getting access to finance using their produce as collateral.

The Ministry of Agriculture, Irrigation and Water Development and the Ministry of Industry, Trade and Tourism said in a joint statement issued in Lilongwe that farmers should sell their produce using structured market systems such as commodity exchanges and patronize warehouse receipt services offered by such market platforms.

Commenting on the development, AHCX communications manager, Thom Khanje, said it was encouraging that government is encouraging farmers to use the commodity exchange in the selling of their produce as that is key to protecting farmers from exploitation by vendors and other traders.

“By selling commodities through the commodities exchange, farmers get the best prices prevailing on the market as registered buyers compete openly on the market through an auction system that ensures that commodities are bought at the highest market price of the day,” said Khanje.

He said through the commodities exchange, farmers are also able to get loans from banks where their produce has not been bought immediately at the exchange.

“All the farmer needs is to bring their commodity to the AHCX warehouse where they will be given a warehouse receipt as proof of deposit of commodity in our warehouse. And where the farmer is not able to immediately sell the produce because they are not happy with prices or buyers are not readily available, they can still access cash from the banks using their commodity in the AHCX warehouse as collateral,” said Khanje.

AHCX is Malawi biggest commodity exchange with 17 warehouses spread across the country at  Chitipa Lufita, Karonga Admarc, Rumphi Bwengu, Mzuzu Admarc, Mzimba Jenda, Kasungu Boma, Kasungu Chatoloma, Dowa Mponela Admarc, Ntchisi boma, Mchinji Matutu, Lilongwe Chilambula, Dedza Chimbiya, Balaka Admarc, Limbe AHL Complex,  Luchenza, Mulanje Muloza and Namwera Machinga.

In the statement, the government has also announced other measures aimed at bring sanity in the produce market and these include the requirement for all buyers of agricultural produce to obtain permits from the Ministry of Agriculture, Irrigation and Water Development in line with the Agricultural General Purposes Act 1987.

The traders to be given the permits would be expected to be holders of licences from the Ministry of Industry, Trade and Tourism – if they are non-Malawians or from local councils if they are Malawi citizens. They are also expected to use scales assized and certified by the Malawi Bureau of Standards (MBS) and register with the Malawi Revenue Authority.

Buying crops while still in the field is now prohibited.