Ghana Commodity Exchange to trade cashew
Ghana Commodity Exchange (GCX) is considering the listing of raw cashew nuts on its trading platform to facilitate the development of the cashew value chain in the country.
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The GCX currently trades maize, rice, sesame seed, sorghum and soya beans.
To facilitate plans to trade in cashew, the GCX in partnership with the World Food Programme (WFP) organised a high level stakeholders engagement in Accra on Tuesday, May 30,2023.
The meeting attracted cashew aggregators, financial institutions, warehouse operators, among others to build a workable model for sustaining the cashew sector.
Benefits
Chief Executive Officer (CEO) of the GCX, Tucci Goka Ivowi said the introduction of cashew on the electronic trading platform of GCX would have many benefits for Ghana’s cashew value chain and market actors involved in the cashew sector in Ghana.
She said the GCX structured trading concept which included commodity quality testing, grading, weighing, packaging and standardisation would offer operators in the cashew value chain an alternative and a more structured market for trade.
Since the inception of the GCX, she said it traded in grains but now "the strategic plan is now to cover tree and cash crops and hopefully move to metals. Everything we do is based on consultation".
She said so far the GCX had traded more than 20,000 tonnes of commodities but had been dealing with smallholder farmers.
"We have now reached the point where our system has been tried and tested. We have built trust and now the bigger buyers are coming but we cannot get the volumes they want," she said.
To meet the increasing demands, she said there was the need to increase storage space for the high volumes of commodities and the GCX was working with the Ministry of Food and Agriculture for the release of some of the warehouses under the one-district, one-factory initiative for use by the GCX.
Challenges
The GCX Chief Operating Officer, Robert Dowuona Owoo, said: "Cashew is critical to our economy and it is important for the GCX to take keen interest in the cashew economy development."
Cashew, which he said was referred to as the poor man's crop and the rich man's food in Ghana, was currently one of the leading agricultural non-traditional export earner.
He said some of the challenges of the cashew sector included quality inconsistency, price fluctuations, limited access to finance, weak infrastructure such as poor roads, limited processing capacity and effect of climate change.
The solution the GCX offered to the challenges he listed included a structured market model, standardised quality, price recovery, access to finance, improved market information.
He said the GCX was using spot trading for the current commodities traded on its platform but it would adopt the auction trading model for cashew.
The GCX, he said, piloted cashew trading in 2021 starting with 50 metric tonnes and scaled volumes in 2022.
Following the piloting, he said it was found there was a willingness of buyers to participate actively in the trading of cashew on the GCX platform due to the structured nature of the market, secured settlement processes.
Working together
The Country Director of the World Food Programme Ghana said the WFP had signed a memorandum of understanding with the GCX to focus on food systems and the development of the value chain.
Deputy CEO in charge of operations at the Tree Crops Development Authority, Foster Boateng, said the GCX model was "a good one and the Tree Crops Development Authority is all for it".
He said it would lead to economic transformation and help check quality issues that would boost the reputation of Ghana on the international market.
The Director General of the Securities and Exchange Commission (SEC), Rev. Daniel Obgarmey Tettey, commended the GCX for focusing on cashew and urged the various stakeholders in the cashew value chain to work together to achieve food security and income security for the development of Ghana.
Know this
The total world cashew market was valued at about $10 billion and it was projected to grow at 4.6 per cent to reach a value of 12.7 billion by 2024.