In boosting the cashew market in Ghana through trade via the Ghana Commodity Exchange, policy support from government remains crucial, according to the Chief Operating Officer of GCX, Robert Dowuona Owoo.
In April 2021, the GCX organised a reserve trading auction to engage market actors in the cashew value chain, which was a maiden trade, on how to trade on the exchange as an alternative and a more structured market for trade.
However, in an interview with the Business and Financial Times (B&FT), the Chief Operating Officer said there is a need for policy support that restricts trading cashew – especially that for export – to only the commodity exchange, as this will enhance the early integration of cashew contracts onto the exchange’s electronic platform.
“If we are able to get a policy support whereby government says that anybody buying cashew, especially for export, must buy from the Ghana Commodity exchange and show evidence of having bought it from the exchange, then this process will be much quicker; because all these exporters of the crop will register with GCX and trade on the electronic platform,” Mr. Owoo said.
He added: “We will be able to sanitise that market, and government will also be able to know exactly how much cashew is being sold to be taxed. We have started with the auctions in a bid to organise the market while engaging with policymakers to get their support”.
The exchange is currently planning to organise another auction in the next two months. The maiden auction recorded trade volume of 50,000kg of raw cashew nut valued at GH¢280,000. “Going forward, we plan to do regular auctions until we are able to organise the market such that we can trade it on the electronic platform,” the COO revealed.
“It could take a whole season to be able to trade contracts on the electronic platform, because the platform will need to be upgraded to be able to accept the parameters of the cashew contracts; and also you need to have the market’s willingness to participate in the exchange – for instance, the current trade of cashew is such that buyers go directly to the producing areas to purchase the crop,” the COO said.
The introduction of cashew onto the electronic trading platform of GCX is expected to bring many benefits to Ghana’s cashew value chain.
In trading through GCX, cashew value chain actors will have an advantage in the availability of a transparent electronic trading platform; a significant reduction in post-harvest losses; access to a warehousing receipt system; the linking of farmers and traders to financial institutions; and provision of a steady supply platform for both exporters and processors of cashew.
The exchange is currently collaborating with the United Nations Industrial Development Organisation (UNIDO) to introduce the trading of cashew onto its electronic platform.
UNIDO, through the Global Quality and Standards Programme (GQSP) funded by the Swiss State Secretariat for Economic Affairs (SECO), has supported the exchange by providing capacity building support in preparation for GCX cashew trade: namely sponsorship for the training of 20 warehouse operators and key staff to understand and interpret national standards and grade cashew; sponsorship of stakeholder consultation to develop a trading contract; and sponsorship of the training of market actors, including GCX members in the cashew value chain and grading.
On June 1, 2021, UNIDO handed over some equipment to GCX to aid with the grading of cashew. The equipment comprises two each of cashew nut cutters, moisture meters and analytical scales.