Egypt has established its first commodities exchange company with a total capital of 91 million Egyptian pounds ($5.7 million), Minister of Supply and Internal Trade Ali Moselhy said on Wednesday.
The company includes seven entities and a number of commercial and investment banks.
The move, directed by President Abdel Fattah al-Sisi, is part of Egypt’s plan to develop internal trade, control domestic prices, and provide food commodities at fair prices, Moselhy added.
The exchange will protect small farmers and producers by collecting their produce to be offered on the exchange’s online platform, he said.
“Egypt’s commodities exchange is a part of the infrastructure of the internal trade system that is expected to encourage small farmers and producers to engage in the formal trade system. The decision will reflect positively on the price of the final product for consumers and producers alike, especially with the decline in the commodities circulation chains among mediators,” the minister said.
The company aims at founding a regulated market for storable commodities and managing and equipping stockpiles, said company chairman Ibrahim El-Ashmawy.
He added that it will establish and manage grain silos and cold chains that will be appropriated for the conservation of commodities.
“Supply and demand will control the prices commodities on the online platform. The exchange will provide the basic commodities, such as oil, wheat, sugar and rice as of the first quarter of 2021,” El-Ashmawy said.
Meanwhile, head of Egypt’s Exchange Mohamed Farid said on Tuesday that the Egyptian Commodities Exchange is a critical pricing mechanism.
In May, the Internal Trade Development Authority (ITDA) finalised the draft law of establishing the Egyptian Commodities Exchange, which was then approved by Prime Minister Mostafa Madbouly.
