Egypt on Wednesday announced the formation of a commodities exchange which will initially trade wheat, oils, sugar and rice beginning in the first half of 2021.
Egypt, the world's largest wheat importer, established the exchange to provide protection for small farmers and producers and make their stocks available to the wider market, Reuters quoted the supply ministry as saying.
The exchange will have 91 million Egyptian pounds ($5.78 million) in capital and will be chaired by Ibrahim Ashmawy, the current head of the internal trade development authority which falls under the supply ministry.
Farmers, traders and producers can deposit their stocks in any of the supply ministry's certified storage facilities where they will be evaluated and graded, then directly traded on the electronic platform, Ashmawy said. Supply and demand will then determine the price of these commodities for the consumer, he added.
It was not immediately clear how the grain would be priced on the exchange and whether the government would purchase directly from it, Reuters said.
The exchange could also allow for developing options and futures contracts for the commodities on offer at a later stage, the supply ministry said.
