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Tag: agricultural commodities

  • GCX Moves to End Farmgate Buying by Foreigners

    GCX Moves to End Farmgate Buying by Foreigners

    The Ghana Commodity Exchange (GCX) is pushing for a major policy change that could transform the way foreign buyers purchase agricultural commodities in Ghana. 

    The exchange is calling on the government to introduce a mandatory trading framework that would require all foreign buyers to purchase commodities through the GCX instead of buying directly from farmers at the farm gate.

    The proposal is designed to create a more transparent and regulated agricultural market while protecting local farmers, processors and traders from what the exchange describes as unfair competition. If implemented, the policy could significantly reshape Ghana’s agricultural value chain by improving price stability, increasing tax revenue and providing valuable data to support national planning.

    Foreign buyers blamed for market distortions

    Speaking on the issue, Joseph Nai Anum, Managing Marketing and Business Development at the Ghana Commodity Exchange, said foreign buyers who travel directly into farming communities have become one of the biggest challenges facing Ghana’s agricultural sector.

    According to him, these buyers compete aggressively with local traders and processors, making it difficult for domestic businesses to secure sufficient commodities for processing and value addition.

    “One of the major challenges affecting our agricultural agenda has to do with foreigners who go into our farm spaces or the farm gates to buy commodities. They compete seriously with our local buyers and processors. We believe that if these foreign buyers are regulated and allowed to buy commodities mandatorily through the Ghana Commodity Exchange, it would help stabilise the agricultural space and also stabilise prices.”

    Joseph Nai Anum

    Mr Anum explained that routing foreign purchases through the exchange would create a level playing field while ensuring transactions are conducted under a transparent and accountable system.

    Joseph Nai Anum, Managing Marketing and Business Development at the Ghana Commodity Exchange

    Export commodities targeted under new policy

    The GCX is also looking beyond staple grains as it expands its ambitions for Ghana’s export sector.

    Mr Anum revealed that the exchange’s next major objective is to facilitate the trading of export oriented commodities such as cashews, shea nuts and soybeans through the exchange.

    He stressed that government support would be essential to make the policy effective and ensure compliance among international buyers.

    Such a move, he noted, would improve confidence in Ghana’s commodity markets while making it easier for authorities to monitor trade activities.

    Government could benefit from higher tax revenue

    Beyond protecting farmers and local businesses, the proposed policy could generate significant financial benefits for the country.

    According to Mr Anum, mandatory trading through the Ghana Commodity Exchange would improve tax collection because transactions involving foreign buyers would pass through a regulated platform.

    “One of the benefits is that the government will be able to collect taxes after trades from these foreigners. It will also help regulate prices and give sellers and farmers the best prices they can get.” 

    Joseph Nai Anum

    The exchange believes this system would not only improve revenue mobilisation but also strengthen government oversight of commodity exports.

    Better data for smarter agricultural planning

    One of the strongest arguments presented by the GCX is the importance of reliable data.

    Mr Anum explained that the exchange would be able to monitor the quantity of agricultural commodities leaving Ghana through foreign purchases.

    “When these foreigners are trading, we get to know how much is being taken out of the country, and the government can use that information in planning within the agricultural space.”

    Joseph Nai Anum

    Accurate information on commodity flows could help policymakers make informed decisions on production targets, food security, export strategies and investment priorities.

    Industry experts have long argued that reliable agricultural data is essential for effective planning, making the GCX proposal particularly significant.

    Farmers urged to embrace GCX services

    While advocating for policy reforms, the Ghana Commodity Exchange is also encouraging farmers and agribusinesses to take advantage of its existing services.

    Head of Operations, Wendy Malm, said farmers who store their commodities in GCX warehouses enjoy secure storage backed by insurance coverage.

    “We would want to encourage everyone to patronise and use the Ghana Commodity Exchange. For farmers, they can bring their commodities for storage in the GCX warehouses. This will ensure that the commodities are well stored. We also have insurance on all our warehouses, so we will ensure that your commodities are safe and sound.”

    Wendy Malm

    She added that farmers can also use warehouse receipts to access financing from financial institutions while waiting for favourable market prices.

    Buyers promised quality and reliable supplies

    Mrs Malm also appealed to food processors, manufacturers and animal feed producers to purchase commodities through the exchange.

    She explained that the GCX platform guarantees quality assurance and provides buyers with access to the right quantities of commodities whenever they are needed.

    “Whether you need commodities for food production or animal feed production, you will be able to have access to quality grains and the right quantity, including large volumes, at every point in time.” 

    Wendy Malm

    This assurance is expected to strengthen confidence among businesses that rely heavily on agricultural raw materials.

    GCX promotes safer food for consumers

    The exchange also believes consumers stand to benefit from greater use of its platform.

    Mr Anum encouraged Ghanaians who consume local staples such as kenkey and banku to choose commodities traded through the exchange because they undergo strict quality testing.

    According to him, commodities traded on the GCX are screened to ensure they meet food safety standards, including protection against harmful contaminants such as aflatoxin.

    With increasing attention on food safety and quality assurance, the exchange says its regulated trading system provides an added layer of protection for consumers.

    As Ghana continues to modernise its agricultural sector, the GCX believes mandatory trading for foreign buyers could become a game changing reform that protects farmers, strengthens local industries and creates a more transparent and efficient commodity market.

    READ ALSO: Deloitte Forecasts Inflation Falling Below 5%

  • Commodity Markets Tremble as Rising Food Costs Trigger Global Economic Anxiety

    Commodity Markets Tremble as Rising Food Costs Trigger Global Economic Anxiety

    Global commodity markets are once again under pressure as food prices climbed to their highest level in more than three years, raising concerns among policymakers, investors, manufacturers, and consumers worldwide. 

    Fresh data released by the United Nations Food and Agriculture Organization (FAO) shows that the global food market is increasingly vulnerable to geopolitical tensions, energy price shocks, and supply chain disruptions.

    The FAO Food Price Index, which monitors monthly changes in the prices of internationally traded food commodities, rose for the third consecutive month in April to 130.7 points. This marks a 1.6 percent increase from the revised March level and represents the highest reading since February 2023.

    Although prices remain below the historic peak of 160.2 points recorded in March 2022 during the early stages of the Russia-Ukraine conflict, economists say the current trend reflects growing uncertainty across global agricultural markets.

    At the center of these concerns is the effective closure of the Strait of Hormuz, one of the world’s most strategic shipping corridors, following escalating tensions linked to the conflict involving Iran. The disruption has pushed crude oil prices higher, increased transportation costs, and raised fertilizer expenses, creating ripple effects throughout the global food system.

    Energy Crisis Fuels Agricultural Inflation

    According to FAO Chief Economist Máximo Torero, rising energy costs linked to instability around the Strait of Hormuz are now directly influencing food inflation, particularly through biofuel markets.

    He explained that while global agricultural systems have shown resilience in the face of disruption, the relationship between energy and agriculture is becoming increasingly intertwined.

    “Despite the disruptions linked to the crisis in the Strait of Hormuz, global agrifood systems continue to show resilience. Cereal prices have increased only moderately so far, supported by relatively strong stocks and adequate supplies from previous seasons. Vegetable oils, however, are experiencing stronger price increases, driven largely by higher oil prices, which are increasing demand for biofuels and putting additional pressure on vegetable oil markets.” 

    Máximo Torero

    This growing linkage between crude oil and food commodities is becoming a major concern as governments continue to expand renewable energy policies that depend on crop-based fuels such as ethanol and biodiesel.

    Vegetable Oil Prices Record Sharpest Increase

    Among all major food categories, vegetable oils recorded the steepest price increase in April.

    The FAO Vegetable Oil Price Index jumped by 5.9 percent month-on-month, reaching its highest level since July 2022. Prices rose across all major edible oils, including palm oil, soybean oil, sunflower oil, and rapeseed oil.

    Palm oil prices climbed for the fifth consecutive month as strong demand from biofuel producers combined with concerns over weaker production prospects in Southeast Asia. The region remains one of the world’s largest producers of palm oil, and any production uncertainty tends to have immediate effects on global supply.

    Analysts say higher crude oil prices are encouraging industries to substitute fossil fuels with biofuels, increasing competition between energy and food markets for agricultural resources.

    Maize and Wheat Markets Face Fresh Pressure

    The rise in oil prices has also spilled into grain markets.

    Global maize prices increased by 0.7 percent during April, driven by tightening seasonal supplies, weather-related concerns in Brazil, and dry planting conditions in parts of the United States.

    The demand for ethanol, which is largely produced from maize, has also intensified due to rising crude oil prices. This has created additional upward pressure on feed and food markets globally.

    Wheat prices also moved higher during the month.

    According to the FAO, world wheat prices rose by 0.8 percent amid drought concerns in parts of the United States and forecasts of below-average rainfall in Australia, both major wheat-producing regions.

    Adding to the pressure is the rising cost of fertilizers, which are heavily dependent on energy inputs. The FAO warned that higher fertilizer costs could discourage wheat cultivation in the coming planting season, as farmers may shift toward crops that require fewer inputs.

    As a result, the organization revised down its forecast for global wheat production in 2026 to 817 million tonnes, representing a decline of about 2 percent from the previous year, although production is still expected to remain above the five-year average.

    Rice Prices Climb as Production Costs Rise

    Rice prices also moved upward during April.

    The FAO All Rice Price Index rose by 1.9 percent, driven mainly by stronger prices for Indica and fragrant rice varieties.

    Exporting countries reported higher production and marketing costs as fuel prices continued to rise. Transportation expenses, energy costs, and supply chain bottlenecks all contributed to the increase.

    Rice remains a staple food for billions of people, particularly across Asia and Africa, making price movements in this sector especially significant for food security and inflation management.

    Meat Prices Reach Record High

    While grains and oils attracted much of the market attention, meat prices quietly reached record levels in April.

    The FAO Meat Price Index increased by 1.2 percent compared to March and stood 6.4 percent above levels recorded a year earlier.

    Beef prices reached fresh peaks, largely due to limited slaughter-ready cattle supplies in Brazil. The country continues rebuilding its cattle herd, reducing short-term supply to international markets.

    Pig meat prices also rose in the European Union as seasonal demand strengthened.

    The rise in meat prices adds another layer of inflationary pressure for consumers already facing higher costs for staple foods.

    Sugar and Dairy Provide Temporary Relief

    Not all food categories moved upward.

    The FAO Dairy Price Index fell by 1.1 percent during April, reflecting lower international prices for butter and cheese. Abundant milk supplies in the European Union and stronger-than-expected production levels in Oceania contributed to the decline.

    Sugar prices recorded the sharpest drop among all major food commodities.

    The FAO Sugar Price Index declined by 4.7 percent from March and remained more than 21 percent below year-earlier levels.

    Improved production prospects in China and Thailand, coupled with the start of Brazil’s new sugar harvest season, helped ease global sugar supply concerns.

    Global Supply Outlook Remains Strong Despite Risks

    Despite the growing market volatility, the FAO raised its forecast for global cereal production for the 2025/26 season.

    Global cereal output is now projected to reach a record 3.040 billion metric tonnes, representing a 6 percent increase compared to the previous year.

    This improved outlook reflects stronger production expectations for several major cereal crops and suggests that global inventories may continue cushioning markets against major price shocks in the near term.

    However, economists warn that prolonged instability around the Strait of Hormuz could sustain upward pressure on energy prices, fertilizer costs, and shipping expenses, potentially complicating global food inflation trends in the months ahead.

    As geopolitical tensions continue to shape economic realities, commodity markets are likely to remain on edge, with food prices becoming one of the most closely watched indicators of global stability.

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