Cairo | Reuters –– Egypt plans to launch an agricultural-focused commodities trading exchange, the first of its kind in the Middle East, by the end of 2016, Supplies Minister Khaled Hanafi said Monday.
Egypt announced plans to set up a global commodities centre in 2014, but gave few details at the time.
Hanafi said that a feasibility study had been completed and the next step was to draw up regulations and establish the electronic infrastructure to connect farmers with traders.
“We’re going to set up the first commodities exchange in Egypt and the Middle East,” Iman al Mutlaq, chief executive of Sigma Investments, which is involved in the project, said.
The bourse would begin with eight commodities — six agricultural commodities, oil and gold — and that this small number would help promote high initial volumes, she added.
“We aren’t going to simply copy and paste other exchanges. This is going to be an Egyptian exchange. There will be price discovery, and we will put prices in Egyptian pounds,” said Mutlaq.
The exchange will feature spot, derivative and futures trading.
As part of the exchange’s launch, a mobile application will be offered to Egyptian farmers that will allow them to have their agricultural output tracked by the market, electronically linking their crops to the exchange, Mutlaq said.
— Reporting for Reuters by Eric Knecht, writing by Lin Noueihed.