Minister of Supply announces establishing the Egyptian Commodity Exchange

Minister of Supply and Internal Trade, Dr. El-Moselhy, announced the establishment of the Egyptian Commodity Exchange Company (“ECEC”), in the process of developing the internal trade, emphasizing that the commodity exchange will provide protection for minor farmers and producers through collecting, classifying their production and making it available to all brokers on the stock exchange platform in the shape of an organized market. Which will allow contributes to increase the competitiveness in the market of minor farmers and producers.

He added in his statement, that the commodity exchange is part of the infrastructure of the internal trade system, and it will encourage minor traders to move into the organized trade system, which will be reflected on the commodities prices for the benefits of the consumer and the producer.

The Egyptian commodity exchange company was established with capital of EGP 91 Million, distributed on the Egyptian Stock Exchange (“EGX”), the Internal Trade Development Authority (“ITDA”), the Holding Company for Silos and Storage (“HCSS”), the General Authority For Supply Commodities (“GASC”), a number of commercial and investment banks, Misr Insurance Holding Company (“MIHC”) and Misr For Clearing Settlement and Central Depository (“MCSD”).

The first meeting of the Constituent Assembly witnessed a discussion of all procedures related to the fast activation of the Egyptian Commodity Exchange Company (“ECEC”), in order to establish an organized market for trading some of the existing and storable commodities.

“Our purpose of establishing the company is creating an organized market to trade “Storable” existing commodities, equipping and managing warehouses, contracting with licensed existing warehouses in addition to establishing and managing grain silos and cooling rooms “refrigerators” for preserving commodities.” Said Dr. Ibrahim Ashmawy, Chairman of the Board of Directors of the Egyptian Commodity Exchange Company.

Moreover, the seller, “a farmer, a trader, or a producer” can deposit the commodities inside the certifies warehouses by the Ministry of Supply after classifying the commodities and grading it by the quality control.

He added that trading will be directly on the online platform of the (“EGX”), which displays the available quantities of each commodity on the screens of the Egyptian Stock Exchange so that it can be controlled by the mechanisms and forces of supply and demand between the seller and the buyer to determine the price of those commodities for the benefit of the consumer, which will reflect positively on the prices of commodities and products.

It was also decided to launch a number of fundamental commodities in the ECEC, such as wheat, oil, sugar and rice as the first stage, during the first/ second quarter of 2021.

For further information or to discuss Egyptian Commodity Exchange in more detail, please contact:

Muhammed Abu Daif m.abudaif@tcmglaw.com or Omar Abu Daif o.abudaif@tcmglaw.com