Commodity prices are at an all time high and many analysts percieve that this is Africa's moment to shine and finally break out from its past.Gold has never shone brighter and so has platinum, copper and diamonds. Africa can turn this global rise in prices to claim a major stake in the world's economic system considering Africa supplies more than 50% of the world's minerals.

Several suggestions have been floated that Africa needs to develop its own Commodity Exchange and stop is over reliance on the Chicago Mercantiel Exchange and the London Futures. An intitiative by the UNCTAD and several African governments has sought to examine the possibility of establishing a Pan African Commodity Exchange or PACDEX as known in paper. This intiattive seeks to establish a regional trading hurb in Botswana thaawill specialise in Mineral futures and Agricultural Products such as Maize. African countrres will connect remotely to the trading platform to place thier bids and asks.

In Kenya, the East Africa Grain Council or the EAGC has established a warehousing reciept system that will allow for the trading of these reciepts in a secondary market such as the NSE using CDS accounts and finally pave way for the establishment of a futures market. A typical warehouse reciept system works in this manner: A farmer delievers his harvest to partilcular warehouse.The produce is sorted and its quality determined.After this the farmer is issued with a warehouse reciept  which he can use to access  loans from a bank.The reciepts can also be traded in a secoondary market.Imagine buying Maize reciepts and having them credited to yoour CDs account!!!! A source from the EAGC claims that they have recieved orders for the reciepts from as far as Malawi and Egypt for these reciepts.

The Kenya Agriculural Commodity Exchange has a trading floor at Jamhuri Park where buyers and seller meet. One needs to purchase a trading ticket at the entrace which is worth around ksh500(USD 5.69).Bids are placed and orders are marched.Plans are underway to launch a virtual trading floor that can be accessed through the KACE website.

Particularly notewothy is the Ethiopian Commodity exchange  which was launched this year.It is one of the most advanced in the region.

Kenyans should also be aware that they can buy and sell South African Futures even from Kenya.Visit the SAFEX website for more details.

 ww.safex.co.za

www.kacekenya.org 

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