In an attempt to advance the agenda of agriculture growth in Ghana, the Ghana Commodity Exchange (GCX) is digging into the process and avenues through which it can introduce new commodity contracts for trading on its electronic platform.
A number of stakeholders from across the sorghum value chain held a meeting few weeks ago, to discuss and agree on the draft sorghum contract prepared by the GCX to introduce trading onto the Exchange.
A brief overview of GCX was given as part of the agenda, preceded by a discussion on the draft sorghum contract prepared by GCX and a presentation on GCX membership.
Generally, the draft contract was well accepted as representing what pertains in the industry.
The 2018 agricultural season (main and second cropping seasons) was characterized by timely and well-distributed rainfall. In addition, the Governmental programme “Planting for Food and Jobs (PFJ)” provided inputs (seeds and fertilizers) at subsidized prices and extension services to about 500 000 farmers, boosting production. As a result, the 2018 cereal output is estimated at 3.4 million tonnes, about 9 percent higher than the 2017 output and 21 percent above the five-year average.
Despite the above-average 2018 cereal production, import requirements for the 2018/19 (November/October) marketing year (mainly imported rice and wheat flour) are set at a slightly above-average level of 1.4 million tonnes. This is explained by the higher demand by traders to replenish their stocks.
However, the World Sorghum Production 2019/2020 will be 58.33 million metric tons, around 0.08 million tons less than previous month’s projection. Sorghum Production last year was 59.34 million tons. This year’s 58.33 estimated million tons could represent a decrease of 1.01 million tons or 1.70 percent in sorghum production around the globe.
It was also suggested that GCX acquires warehouses within the sorghum growing communities and districts for easy aggregation and also to ensure that farmers don’t travel far to deposit their grains. This, stakeholders said would reduce transportation and handling cost.
There was also a debate by the participants on whether Red and mixed Sorghum should be added to the contract and traded on the exchange or taken off.
The Exchange has plans in motion to add on more warehouses in the Upper East region and possibly acquire some district and community warehouses,
Sorghum is a major food grain in most of Africa, where it is also used in traditional beer brewing.