Commodities exchange to help stabilise prices of agricultural produce

A new trading system has been launched in Eldoret, aimed at giving producers of agricultural commodities a platform to buy and sell their produce using a model similar to the stock exchange.

Experts spearheading the new commodities trading system said agricultural producers and dealers in other products will get the chance to place their goods in the system and wait for better prices.

Trade Principal Secretary Alfred K'ombudo said the CMX platform is Kenya's first private sector-led commodities exchange.

K’Ombudo lauded the exchange platform, saying it was dedicated to providing a transparent, efficient and secure platform for trading various commodities.

"This initiative will revolutionise our commodities market, providing much-needed stability and predictability. It is a testament to the power of public-private partnerships in driving economic growth," the PS said.

Promoters of the CMX said the new trading system was designed to offer solutions to the fluctuation of prices of agricultural products as well as the exploitation of farmers especially in the country’s food basket.

It promises to allow farmers to use stored produce listed in the market exchange platform as collateral for credit, designers of the platform assured commodity traders.

CMX chief executive Jacob Maaga told farmers and commodities traders that the platform guarantees transparency in buying and selling, particularly, in agricultural production where middlemen have shortchanged producers for decades.

“Under the platform, farmers are empowered, traders thrive, and the agricultural sector is the engine of economic growth. This is the promise of CMX, and we are committed to delivering it,” Maaga said.

He said the market exchange platform will ensure farmers receive fair compensation for their hard work in production.

Uasin Gishu Governor Jonathan Bii lauded the innovation, saying maize and wheat farmers would engage directly with markets and in the process minimise exploitation by middlemen.

"The establishment of CMX is a game-changer. It provides a platform where farmers can connect directly to markets, access transparent pricing, and unlock new economic opportunities,” said Bii.

"By facilitating trade in a structured, secure, and efficient manner, CMX will empower farmers to focus on what they do best; producing quality commodities while ensuring they receive fair returns for their labour."

Farmers can also store their produce in certified warehouses, access financing using their stored goods as collateral, and sell their commodities through futures contracts.“CMX provides access to transparent markets where prices are determined by demand and supply, not by intermediaries,” Maaga noted.

“The exchange offers a reliable and structured environment for trading commodities, reducing risks and increasing efficiency. This transparency attracts more investment into our agricultural sector, fostering growth and innovation.”

Maaga said the exchange system will have a ripple effect on agricultural production, as it may trigger increased production motivated by better prices of produce.

“By eliminating inefficiencies, CMX will reduce post-harvest losses, improve food security, and boost economic productivity. The exchange will also create jobs and spur development across the agricultural value chain, from logistics and warehousing to technology and finance,” he promised.

Pioneers said if embraced by farmers, the platform would enhance market stability, improve risk management, and foster economic growth, benefiting all stakeholders in the agricultural and commodities sectors.