The Securities and Exchange Commission has approved that one of the country’s most popularly consumed food commodities, Ghana Rice, be traded on the Ghana Commodity Exchange.
Ghana rice contracts will now be traded on the exchange’s electronic trading platform, subject to GCX meeting SEC’s requirement that it undertakes a few internal changes.
This is expected to significantly boost the output and the fortunes of smallholder rice farmers, as the Exchange will serve as a reliable platform for supply to meet demand at a reduced transaction cost.
Rice has increasingly become the most consumed food staple in the country after maize. Between 2007 and 2015, Ghana’s rice imports rose from US$151m to US$1.2bn, mainly to supplement consumption gaps left by domestic production.
In view of this, government through the Ministry of Food and Agriculture and private sector players have undertaken measures to boost domestic rice production. It is estimated that about 1.2million Metric Tonnes of rice would be produced in the 2020/21 harvest year.
The GCX earlier this year partnered the ARB APEX Bank, which includes clusters of community and rural banks to advance short term loans to farmers through warehouse receipts. Effectively, smallholder rice farmers intending to store initially and sell at a later period when prices are better in the season could use their commodities as sole collateral to obtain short term loans from GCX partner banks.
The Exchange also notes that smallholder farmers could further benefit from other GCX value addition services such as moisture testing, cleaning, drying, grading, re-bagging and storage services all aimed at improving the product quality of the smallholder farmer’s harvest so that they stand a better chance of attracting premium prices.
The addition of rice to the list of contracts traded on the GCX will significantly increase marketing opportunities for rice farmers as well as address post-harvest loss issues and their lack of access to financing, which are key industry concerns.
Earlier this year, the GCX signed a Memorandum of understanding with a number of rice industry players including the Ghana Rice Interprofessional Body (GRIB), the John Agyekum Kufuor Foundation (JAK), Intervelle and others to support the production, post-harvest management and marketing of rice produced in Ghana.