“The lack of structured markets and investment in Africa’s agricultural sector has seen Africa’s maize yields stagnate for the last five decades the where the yields now are only 20% of developed economies,” commented Ponder. “Structured markets provide farmers with a financial infrastructure to encourage lending to the agricultural sector, a price discovery method that can see a 20% increase in prices to farmers and the potential to manage farmer risk through derivative products.”
Ponder continued, “Currently there are 28 countries taking initiatives to develop commodity exchanges and both the public and private sectors play an important role in developing these structured markets. The private sector needs to provide for product aggregation, including grading, storage and warehouse receipts, and for market infrastructure elements like trading platforms and clearing and settlements. The public sector needs to provide a fair and consistent legal and regulatory framework, outreach programs and storage, transport and communications infrastructure.”
INTL FCStone is committed to developing Africa’s agricultural sector by providing capacity building support including educational opportunities on the topic of risk management and commodity trading. There are three such opportunities being developed in 2016 in Abuja, Nairobi, and Lusaka. INTL FCStone also sponsors work experience placements and study visits as well as actively seeking partners to extend these initiatives.