Karachi: The first Electronic Warehouse Receipt (EWR) of yellow maize was traded at Pakistan Mercantile Exchange (PMEX), the country’s only multi-commodity futures exchange. This is a historical event for Pakistan as it marks the dawn of a new age where the agricultural sector of Pakistan can be documented and modernized electronically.
Under the guidance of the Securities and Exchange Commission (SECP), the Government of Pakistan has now completed this initiative from the formation of a Collateral Management Company (CMC), accreditation of warehouses, issuance of the EWR, financing against EWR and now the trading of EWR at PMEX.
The introduction of EWRs in Pakistan offers three options to the farmers: 1) safekeeping of commodities to avoid distress selling and post-harvest losses,2) using EWR as collateral for borrowing from financial institutions, and 3) trading of EWRs at the PMEX platform to efficiently sell the produce at a fair price.
The EWR mechanism aims to improve the performance of the agricultural sector by stimulating economic growth both in the agricultural sector and in the construction sector by creating an incentive for the private sector to construct new warehouses. This will increase the capacity of the country to store agricultural produce without wastage, alleviating poverty and reducing shortages of agricultural produce in Pakistan.
Mr. Ejaz Ali Shah, Managing Director of PMEX, speaking on the occasion said, “We are delighted on the commencement of EWR trading at our platform. This would not have been possible without the visionary leadership of SECP, which has worked relentlessly over the years to materialize this initiative into a reality.
This is a revolutionary and landmark achievement in the history of Pakistan, which will uplift the lives of our smallholder farmers. Trading of EWR at PMEX will create a vibrant, unified national market for agricultural commodities. We are confident that creating a pan-Pakistan market for agricultural commodities will help revitalize Pakistan’s agricultural sector.”
He further said, “PMEX plans to integrate the EWR trading platform with the Global Commodity Trading Platform (GCTP), a wholly owned subsidiary of PMEX, offering an e-commerce platform for the trading of agri and non-agri commodities. This digital platform will connect producers from Pakistan with buyers across the world. Connecting EWR to the GCTP system seamlessly would enable CMC participants to offer their produce to local as well as international buyers.”