1. AFLATOXIN stakeholders WORKSHOP STATUS OF WAREHOUSE BUILD UP AND VISION FOR THE ACCOMPANYING LABORATORIES BY MRS KHADIJAT ABDULAZIZ ABUJA SECURITIES AND COMMODITY EXCHANGE 1

2. Introduction Commodity Exchange. Is a market that fosters transparent and efficient trade in physical and non-physical commodities as well as their derivatives in order to ensure price discovery and the performance of the commodity trade contract. Commodity Exchanges trade on contracts for immediate delivery (Spot), It also trades in contracts for future delivery(Forward, Futures and Options). 2

3. Functions of A Commodity Exchange A commodity exchange performs the following functions; Assures all commodity market players the security they need in the market through providing a secure and reliable End-to- End system for handling, grading, and storing commodities, Match offers and bids for commodity transactions, and a risk- free payment and goods delivery system to settle transactions, while serving all fairly and efficiently. Creates trust and transparency through aggressive market data dissemination to all market actors, through clearly defined rules of trading, warehousing, payments /delivery and business conduct, and through an internal dispute settlement mechanism. Provides market integrity at three important levels: the integrity of the product itself, the integrity of the transaction, and the integrity of the market actors. Puts in place a robust price discovery system 3

4. Characteristics of commodity marketing in Nigeria Currently, Nigerian farmers have no control over the supply side of the market, as they can not possibly influence the price of their produce particularly in times of glut and these prices are usually below the farmers cost of production. Some of the major characteristics of the markets are: Poor market information/intelligence Lack of identifiable/available market Lack of competition No quality standards Poor communication Lack of transparency No enforceable contracts /dispute resolution mechanisms Very conservative approach and lack of market fundamentals 4

5. Contd Unsophisticated and underdeveloped markets Little reliable data on trade flow Much of the trade is informal 5

6. What ASCE can bring to the market Reliable Market information Enforcement of rules and regulation to ensure contract performance, Correct grading certified by recognized grading laboratory, Warehouse receipt system, Clearing and Settlement infrastructures 6

7. What ASCE plans on warehousing System and grading of laboratories A. Initiated a TWG to come up with a harmonized National Grading System(NGS) NGS will; Ensure that buyer and seller are not short changed in trade, as grade of all traded commodities are clearly defined in the contract, Provide a universal or common language for describing produce in the market(s) Help to gradually bring about improved quality of commodities in the market as farmers will be aware that better grades will attract premium price. 7

8. Contd The TWG ON NGS: Identified commodities of interest based on tradable commercial volume and export value. These will include in the first instance the following: cocoa, cashew, cotton, sesame, maize, sorghum. Identified the National standards for (i) above. Identified the relevant stakeholders in the selected commodities value chain. Identified the existing market structures of these commodities. Is planning workshop(s) to harmonize grading standards of these commodities. 8

9. Contd Plan is in place to embark on comprehensive warehouse inspection/tour across the country to determine their suitability (capacity, structural condition, accessibility etc) The six zones where grading laboratories are being considered are; Nassarawa state, (north central), Kano (north west), Gombe state (north east), Ondo state(south west), Cross river state(south south), Imo state(south east) Installation of high precision equipment (HPLC, ELISA(and other accessories needed for assay of mycotoxins and other contaminants in commodities at the designated warehouses. Capacity building on mycotoxins, pesticide residue, heavy metal analysis is being planned. Collaboration with stakeholders (MDAs, NGOs, private sector is being sought. 9

10. Mycotoxins mapping For the selected commodities, ASCE plans to conduct quarterly sampling and analysis (for one year period to determine the major contaminants e.g mycotoxins, pesticide residue, their occurrences in storage, along with basic physico- chemical screening/grading of the commodities. The data generated will form the basis of the planned action to reducing these contaminants occurrence in order to enhance market access of agricultural commodities in the international market on one hand and save guard the health of the Nigerian consumers on the other. 10

11. Reducing occurrence of mycotoxins Collaborate with Ministry of Agriculture and Rural Development on educating farmers, merchants and all commodity handlers on GAP (Good Agricultural practice Ensuring proper warehousing structure/facilities. 11

12. Conclusion The cost of setting up, equipping and managing functional laboratories needed for analysis of contaminants (mycotoxins, pesticide residues, heavy metals) is huge, hence the support of Government is crucial. The exchange plans to seek state governments support in leasing suitable warehouses in their states for a comprehensive implementation of the warehouse receipt system in Nigeria. In order to sensitize and further educate potential members of the exchange and their clients on proper management of commodities (at farm, processing, warehouses, in transit, etc), a course on Good Agricultural Practice(GAP) will be introduced in the ASCE training curriculum. Finally, ASCE will continuously seek synergy with other relevant organizations to play it own role in the goal to ensure high quality agricultural commodities 12

13. Thank you 13