Johnson Progress

The absence of harmonized trading standards is hindering the implementation of a memorandum of understanding (MoU) signed in March 2025 between commodity exchanges in Zimbabwe, Malawi, Zambia, and Tanzania.

 

The MoU aimed to enhance the fungibility of commodities among the four nations, raising additional capital from alternative markets.

 

Zimbabwe Mercantile Exchange (ZMX) chief executive officer Collen Tapfumaneyi highlighted the significance of harmonizing trading standards, stating, “Lack of harmonised standards is one of the biggest issues that is slowing commodity trade between the four countries.”

 

Tapfumaneyi emphasized that differing grading standards between countries can affect trade and pricing.

 

For instance, what Zimbabwe considers grade A might not be the same in Tanzania.

 

To resolve this issue, Tapfumaneyi stressed the need for technical alignment and international cooperation, as grading is governed by law in both countries.

 

“To resolve this, we need to harmonise our grading parameters, but it’s not a simple task,” he said.

 

The ZMX has identified viable commodities for trading and developed a mechanism for determining import parity price and export parity price.

 

Tapfumaneyi noted that regulatory requirements for exporting and importing countries would need to be established once viable commodities are identified.

 

He also highlighted the importance of logistical arrangements and costs in determining the feasibility of trading certain commodities.

 

“You have to understand that not every commodity is feasible, in the sense that apart from just the price of that commodity, the logistical arrangements, and costs, if you build them into the price, it may become uncompetitive on either side,” he explained.

 

Despite the challenges, Tapfumaneyi expressed optimism that trade would soon begin, stating, “We have identified the commodities and agreed on pricing and transactions, adding that they were hopeful trade would soon begin.”

 

The ZMX is working on ensuring certain conditions are met, such as scientific and technical requirements, to facilitate smooth trading.