7-
LIMITED
ECA/l>&JLP0C/Lusaka/lv/4
11 December I98O
Original; ENGLISH
ECONOMIC COTIKI&EION FOB AFPICA
Multinational Programming and Operational
Centre for Eastern and Southern Africa (jIULPOC) Fourth Meeting' of the TyiULPOC Committee of
Officials- 16-17 January 1981 and Fourth Meeting of the Enlarged Council of Ministers-19-22 January 1981
Maseru, Lesotho -- 16-22 January l?Sl
FEASIBILITY STUDY OK THE SSTTiPLISHIElT OF AGRICULTURAL
COtfflODITY raCKAITGJDS FOR EASTFRF AIO) SOUTHERNAFRICAN STATES
RESS REPORT
Para^rapjis IKTRCDUCTIOF - - .-
'" "" ■"■ - --- 1-2 1
I. THE CONCEPTUAL FRAPK^RK op THE STUDY ----„_.- 3-10 1
II. PROGRESS MADE IF THE PREPARATION OF THE STUDY - _ „ 11-12 3
111= FUTURE STEPS TO FS TAVW - - -.„.._„_ 13 _ 1Al;CA/ioULPOC /Lusaka/lV/4
INTRODUCTION
modity exchanges for Eastern
tor JJuO-1^1. Tnero , the Lusalca HULFOC Council of Ministers at
+7 r a£ mPOC
u in/fCtlVG °f tMS MpOrt 1S t0 ilf orm momber S^t°B of ti,e
The report aims in particular at setting out the
study and the actual setting up of tho proposed commodity exchanged
I. THE CONCEPTUAL i-'RAilB'JORK OF TfD'J STUDY
and oonse^ently in
scale emplriOal market structure analysis of the
oha^t^istics of the co^odities that will
KCA/^ULPOC/Lusaka/iy/4
Page 2
6. On the basis of the above analysis, the possible functions, operating modalities and institutional framework of the proposed exchanges will need to be clearly set out with due regard to the specific realities of the
subregion.
7. Broadly speaking, the envisaged exchanges are expected to perform inter alia the following general and specific functions:
A, General functions
(i) Primarily, to act as information centres for the exchange of agricultural commodities;
(ii) To be centres for policy development with regard to marketing institutions 5
(iii) To serve as mechanisms for forwarding information on whether or not, and to what extent, local producers should expand tlie production of particular commodities at any given time to meet export possibilities.
B. Specific functions
(i) In accordance with the current supply and demand of commodities, to help to determine the prices of the commodities that are likely to be traded in the exchanges;
(ii) In addition, to serve as clearing bouses by providing financial transaction facilitating mecl.anisms, which aim in particular at guaranteeing contract performance in accordance with the
rules of the exchanges*
(iii) To supervise trading activities, adopt, and enforce such rules and regulations as will prevent trade malpractice among the members of the exchanges and facilitate the speedy settlement of business disputes.
8. As for the operating modalities of the proposed exchanges, while they would obviously have to be worked out to take account of the specific trading and other conditions obtaining in the subregion, it is envisaged that they would be based primarily on the principle of open confrontation of bids and offers so as to give all the members of the exchanges equal opportunity to buy and sell at the best possible price at the moment of trading.
CA^IULPOC/Lusaka/lV/4
Page 3
Lure ^ ^^^^o^^M^^^^^n^^ f
tl-p nnr<+ ■ -p ■ +■ -p-1.1 ---..-.-* ,-.., WH5.1. u diiu. jjuxu., as wen as
-r--l-i rJ-,-.q n ° 1C ^r es an^ ^alities of the oomiTiodities
' —^-nt), their oo^ition and
requirQd aanual tudeet for tbe proposed
PR0GRi:S3 MAIM HI Tlffi PREF.'VlLiTIOlv OE1 TIu!,1 STUDY
and TT o? ?CCOrdancVi1;h thS ^ifi1^ work plan of this project, phases I
and II of tne project nave now been completed. These include the preparation
01 the terms of T-pfp-rpnno -F^r> +^,« *>~nr,i-u;-, ^.. , , ., ^epdiacion :or tne establishment of
^
examination of .oosts and benefits Ukelv to result therSom.
12. The remaining phases III and IV relate to the extermination of
III. STOPS TO 33U TAKIL'N
13' co member States of the Lusaka JIULPOC by July l?8l. Tlie feasibility study is expected to be completed and made avail-hie -vail^ble
Lusaka MULPOC^P^t ^^ ^ ^^^vernmental meeting of experts of the
.uusaicd, iauLPOO snould be convened in nntn^-n i ifln + ■ - ,,
