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Commodity Exchanges and Ware house receipts system. Lessons learn’t in Uganda.

Commodity Exchanges and Ware house receipts system. Lessons learn’t in Uganda. Presentation by Alex Rwego. Current Set up of Grain Production in Uganda. 80% of Uganda population is involved in Agriculture Grain production dominated by smallholders (subsistence agriculture)

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Commodity Exchanges and Ware house receipts system. Lessons learn’t in Uganda.

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  1. Commodity Exchanges and Ware house receipts system. Lessons learn’t in Uganda. Presentation by Alex Rwego

  2. Current Set up of Grain Production in Uganda • 80% of Uganda population is involved in Agriculture • Grain production dominated by smallholders (subsistence agriculture) • Each smallholder farmer cultivating on approximately 1-2 hectares of land • Average production yield per hectare is approximately 2000Kgs

  3. Current Set up of Grain Production in Uganda • Poor post-harvest handling at farm gate • Lack of proper storage facilities at farm gate • The two above lead to wet, unclean, and upgraded grain flooding the market at harvest • Marketing of grains is liberalized • Grain marketing chain is dominated by ‘middlemen’ that marginalize farming communities

  4. Regional movements of grain Informal Cross border trade Beans Maize Rice

  5. Current situation • Kenya is to rely on South Africa, Uganda and Tanzania for maize. • Kenya has received a total of 84,731MT of maize and 19,391MT beans from Uganda and Tanzania in 2009 • An estimation of 300,000MT maize and beans moving to Southern Sudan

  6. Addressing Quality and Inspection Issues using Warehouse Receipt System

  7. Licensed Storage Facility

  8. Processing of unclean, wet and ungraded grain 3174MT of Maize crossed from Tanzania to Kenya in May’09 through informal cross-border trade

  9. Quality Control

  10. Warehouse Receipted Stock

  11. Issuance of Electronic Warehouse Receipt

  12. Brokers trading WR at Exchange Floor

  13. Trade Finance in Uganda • UCE has carried out risk mitigation training to 8 commercial banks and Microfinance Support Centre. • Currently 2 commercial banks have signed MOU’s with UCE, developed their product and we are in the process of signing an additional 3 MOU’s. • The Banks will finance 60% of the value of the deposited commodity.

  14. Lessons Learn’t in Uganda. • For exchanges to be successful the WRS must be developed along side them. • Enforcement of quality standards. • Building of standardised storage facilities to facilitate domestic, regional and international trade and also address food security issues

  15. Lesson learn’t cont’d • Develop Market Information Systems to enhance trade. • Continue to engage the financial sector to finance ware house receipts to create more liquidity in our economies. • Develop commodity exchanges in the region that are interlinked to each other • Promote WRS and carry out intensive training for stakeholders on how to use the system. • Most importantly the government and the private sector should have PPP to build the market infrastructure to develop this system. The donors could play a significant role too.

  16. Contacts Alex Rwego Manager, Uganda Commodity Exchange, Tel: 256-312-262921/2 Email: alexkr@uce.co.ug Website: www.uce.co.ug

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