PMEX remains committed to playing its due role in the development of a robust and sustainable ecosystem for commodity trading that can free the growers from the shekels of traditional trading system and enable them to get premium on superior quality produce and guaranteed prompt payment.
With continued perseverance and support of Securities and Exchange Commission of Pakistan (SECP) and value chain partners, PMEX has been successful in developing a workable model for trading physical commodities and has launched deliverable Red Chilli contracts in 2015. In this respect the Exchange worked with the following partners:
--SGS PAKISTAN FOR QUALITY CERTIFICATION
--AGILITY PAKISTAN FOR WAREHOUSING AND LOGISTICS
--PAKISTAN AGRICULTURE COLLATION FOR ON-GROUND FARMER FACILITATION
At present, PMEX offers weekly and longer dated futures contracts of Dandicut/Longi and Hybrid varieties of red chill at its electronic trading platform. The Exchange has received an encouraging response from all the market participants for the efforts that resulted in better quality red chilli production, quick cash pay-out to the farmers and overall efficiency in the red chilli trade.
Though it was the first ever listing of a spice at the Exchange, the concerted efforts of all the market participants ie growers, traders and corporate buyers enabled PMEX to achieve this milestone. In FY2016-17, the trade of Red Chilli at the Exchange surged to 2,200 tons from 600 tons as compared to previous year.
The quantum jump in the traded volume is attributed to various initiatives taken by the Exchange during the span of two years. Firstly, PMEX made rigorous efforts to increase awareness and improve participation of buyers and sellers at its trading platform. Several awareness programs and roadshows were organized in Kunri, Faisalabad and Karachi prior to the arrival of crop of 2016 and 2017. The programs were aimed at creating awareness among the farmers and traders about the benefits of trading at a PMEX's technology driven platform. Besides, the programs also highlighted the facility of acquiring credit from the financial institutions against stock of Red Chilli kept at PMEX designated warehouses. These programs brought together market participants and value chain partners under one roof and provided a platform to the farmers and traders to explore the opportunities associated with trading of Red Chilli at PMEX.
Secondly, having persuaded the growers and traders to actively trade Red Chilli at its trading platform, PMEX was also successful in bringing on board the Sindh Enterprise Development Fund (SEDF),
In FY2016-17, the trade of Red Chilli at the Exchange surged to 2,200 tons from 600 tons as compared to previous year.
Sindh Board of Investment to offer subsidy to Red Chilli growers to bring down the cost of trading. Lastly, the Exchange arranged commodity based financing for the first time in the country for agri products kept at its designated warehouse for trading. The Exchange brought on board Zarai Taraqiati Bank Limited (ZTBL) to extend loans against the commodity as collateral whereas the historical mode of financing has primarily been based on passbook/land papers.
Going forward, the Exchange plans to offer its physical deliverable commodity trading platform to the international market thereby enabling foreign buyers to buy local commodities such as Red Chilli, Rice, etc. with convenience of trading and confidence of quality assured produce as per international standards.