Assessing the readiness of Zimbabwe in adoption of an agricultural commodity and derivatives market- a review paper

Abstract

With the increased fragmentation of the Zimbabwean agricultural system it has become apparent for stakeholders to look for new ways to managing market risk to enhance farm profits. Globalisation has also increased the pressure for regional and global integration hence the possibility of a commodities and derivative exchange has been under serious consideration by the Government and stakeholders. This review has shown that while financing the exchange is central to its implementation, more studies need to be done to assess, the level of interest by farmers, infrastructural, the logistical, warehousing, capacity building and legal parameters. A specific study on viability of the exchange is also required. The review has also shown that the success of such an exchange in sub-Saharan Africa, with the exception of SAFEX is limited due to the main issues of volumes of trade and strong government interventions in the market.