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What is a Commodities Exchange?
A commodities exchange is a legal entity that determines and enforces rules and procedures for the trading of standardized commodity contracts. AFEX Commodities Exchange provides a national trading platform and develops a supply chain network for select commodities. Our approach is to create a market that includes the small local farmers which means not providing an exchange for the financial market alone. AFEX provides support for this process and encourage practitioners by designing vehicles that make investment opportunities that are otherwise too risky or complex to pursue, easier and safer for farmers and investors.
What is the legal framework to regulate the commodity market?
The Securities and Exchange Commission (SEC), Nigeria is the apex regulatory institution of the Nigerian commodities market, and is supervised by the Federal Ministry of Finance.
What are the investment opportunities available in the commodities market?
Commodities markets across the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, oil, metals, etc.) and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures
What is a warehouse receipt?
A warehouse receipt is a document of title showing grade, weight, mode of packaging, name and address of the warehouse manager and, in some cases, the shelve life of the commodity
Can warehouse receipts be traded?
Yes, if it is negotiable
How was AFEX established?
AFEX Commodities Exchange Limited (AFEX)Nigeria was established in Nigeria in 2014 through a Public Private Partnership with the Federal Ministry of Agriculture and Rural Development (FMARD) to establish a Warehouse Receipt System (WRS) and Commodities Exchange for Nigeria. AFEX secured its license as a Commodities Exchange in compliance with the Investments & Securities Act, 2007 and the Securities and Exchange Commission’s Rules & Regulations in March 2015 and is the first private-sector led and funded Commodities Exchange in Nigeria and across West and Central Africa.
Who can apply to be a member?
Any individual/institution can become a member. You can become a member whether you’re a farmer, a private investor looking to diversify your portfolio, a business or intermediary seeking capital, or a public agency or philanthropic foundation looking to make your funds go further. As a member you will join a global community of institutions and businesses dedicated to increasing the livelihood of smallholder farmers and driving capital to where it is needed most.
What benefit does AFEX offer to its members?
AFEX offers its members a combination of the following benefits:
Data & Intelligence: Original content that builds the evidence base for Agri-finance and supports practitioners in their efforts to execute transactions, including access to data on past finance transactions, trend reports, region and sector briefs.
Deal Flow: An online deal and investor matchmaking platform for investors and those seeking capital to connect on finance deals.
Why should I invest in agricultural commodities?
Agricultural commodities may be appealing as an investment for many reasons. These assets can serve as an effective hedge against inflation, since food prices are often among the first to rise when prices begin to climb. Agricultural commodities can also perform well when global populations are growing, or when a growing middle class leads to increased demand.
What is a commodity warehouse?
A warehouse is a building that is constructed for storage of commodities such as manufactured goods, agricultural produce, etc.
What does AFEX do?
We enable the transition from production to transaction for agriculture commodities. AFEX Nigeria provide solutions to farmer’s challenges in aggregation, storage and financial inclusion. AFEX Nigeria generates agri-finance data, intelligence, and deal flow to increase private sector investment in commodities.
What are the products offered by AFEX?
1. AFEX Commodities Index
2. Exchange Traded Security
3. Food Security Funds
4. Forward Contacts
6. Collateral Management
7. Input Program
8. Storage & Aggregation Services
AFEX technical capabilities
We pride ourselves as the leader in commercial storage and collateral management services in the country with a strong focus on preserving the integrity of the underlying assets and also managing the risk of our clients.
Why become a member?
We are an organized and efficient platform within which financial market participants can actively participate in the commodities markets. Our Members are from diverse firms and interest groups, ranging from the farmers, dealers, market regulators, market makers, investors, brokers and other interested participants. As a Member of AFEX, you gain access to one of Africa’s leading and largest commodities exchange
How much does membership cost?
Membership fees are due annually and are dependent on type. Read more on our membership categories here.
How will farmers know the current price of their produce?
Closing Prices of agricultural produce on the exchange are displayed in our warehouses and will be relayed daily on radio and television as well as published in the print media. Information on current prices of agricultural produce can also be obtained from AFEX Website.