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Ending Africa’s commodity concerns

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Lisa Napoli: A different sort of commodity is always at issue in Africa. From South Africa, Terry FitzPatrick says this isn’t about growing grain, but rather trading against it.


Terry Fitzpatrick: Farming in Africa is tough enough without the risk that bureaucrats or middlemen will cheat you when you sell your crop.

Economist Mohammad Karaan says commodity exchanges are needed to ensure stable markets.

Mohammad Karaan: African agriculture in particular is exposed to volatility, which then affects or brings us an uncertainty.

That uncertainty could end in Ethiopia, when the nation’s first exchange opens in March. Farmers will know the daily price for crops, and can negotiate future contracts. It’s part of a push throughout Africa to deregulate agriculture and let markets determine prices.

Chris Sturgess at the Johannesburg exchange thinks more trading centers are coming:

Chris Sturgess: If government is going to be setting the price of your commodities, you don’t need an exchange. Because government will say fine, your price today is $100, you acknowledge all your corn, and that’s it.

Experts say free-market exchanges can generate better incomes for farmers, bringing food security to Africa.

In Cape Town, I’m Terry FitzPatrick for Marketplace.

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