Capacity Support to the Agricultural Commodity Exchange for Africa Trust Quarterly Progress Report July to Sept

ACE operates a live exchange trading platform, facilitating trade of commodities worth USD 19,885,831 million across the exchange since its inception. The organization has been struggling with limited funding and lack of market support, but COMPETE awarded ACE bridging funding to establish necessary processes and baselines for agricultural commodity market access. During the period from July to September 2011, Malawi's prime agricultural marketing season, ACE welcomed several domestic buyers to procure through the exchange. The exchange facilitated trades of more than 1765mt to a total value of just above $500k, generating just above $1k commission for the exchange. Most sellers were smallholder farmers, generating incomes of well above $350k on all smallholder farmer contracts. These contracts were realized through robust training and sensitization meetings in rural areas, as well as Esoko MIS, which allowed price push notifications to be sent to farmers' registered cell phones. ACE has made significant progress in implementing its warehousing receipting system. The organization issued its first receipt in July 2011 for 35mt, delivered at a value of Mwk27000 per mt, which was subsequently sold two months later at a value of Mwk36000. Despite a total cost of finance interest, storage, and commission, the commodity owner took a total profit of 30% more than he would have received during his deposit period. About 116mt of maize is on receipts so far, and planned work on constructing rural warehouses on two sites has already started and is expected to be ready for the next harvest season. The COMPETE funds have continued to enhance ACE's capacity to undertake increasing procurement demands, as well as means needed to develop software applications necessary to fully harness the benefits of WFP and other commercial operators in the market. Strides have been taken to complete the warehouse receipt system software, which is now fully integrated with trading platforms and bid volume only platforms. Commodity owners with warehouse receipts will be able to put up receipts for sale on ACE's trade platform online and also access WFP's bid volume only auction. ACE's IT and software developments have also made significant progress. The three ACE systems are fully integrated, with the warehouse receipt system now fully integrated with trading platforms and bid volume only platforms. The database is normalized, allowing the system administrator to control from one place, and contracts are being auto-generated on ACE's trading platform. The organization has also made progress in expanding its reach to farmer organizations, with more than 240 farmers and traders now receiving push notifications on their mobile phones courtesy of Esoko MIS. ACE has utilized this tool to alert trade opportunities, with one cooperative in Ntchisi selling 14mt at a value of $10,733 through this initiative.