February 16, 2016

The Egyptian government is partnering with Jordan-based Sigma Investments to launch the first agricultural-focused commodities bourse in the Middle East by the end of this year, according to Reuters. The EGYCOMEX, Egyptian Commodities Exchange, was formed under a partnership of 20% government investment and 80% private investment, and will trade futures and spot for grains as well as gold and oil, said Iman al Mutlaq, chief executive of Sigma Investments, reports Trade Arabia.

"We aren't going to simply copy and paste other exchanges. This is going to be an Egyptian exchange. There will be price discovery, and we will put prices in Egyptian pounds," said Mutlaq to Reuters.

Egypt is the largest wheat importing country in the world, buying 10 million tons per year from global markets, and Mutlaq told Trade Arabia that the bulk of the country’s total grain trade, currently handled by state grain buyer, GASC, will be done on the exchange – leading to about 80% of the country’s total grain trade being through the new bourse.

In addition, a mobile app will be made available to Egypt’s grain farmers, who produce about 3 million tons per year, allowing them the ability to have their crops tracked by the market, and giving them access to transparent grain prices and trades.

"It will effect [sic] the local Egyptian market a lot when a farmer can sell grains at a better price or use them as collateral for loans," Mutlaq told Trade Arabia.

Sigma is currently working with the Egyptian Financial Supervisory Authority to put the legal structures for the exchange in place, according to Zawya, and is establishing regulations to mitigate the risk of a bubble as funds pour in upon the opening of the exchange.