businessincameroon.com

It is the turn of Cameroon to consider establishing an exchange of commodities in Yaoundé to stem the continuing decline in incomes of agricultural producers, despite the rising in worldwide prices.

By Hance Guèye

Cameroon has difficulties in the agricultural production, which is important because it provides 55% of its export earnings and contributes with 45% of gross domestic product. Coffee production fell from 132 000 tons in 1986 to   33 000 tons in 2008, the cotton fibre from 124 000 tons in 2004 to 59 800 in 2008. It is therefore urgent to reverse this trend. Many problems derive from the decreased production. Among them is the marketing. Producers have little off the periodic markets, where they are selling their products, sometimes on credit, mostly to resellers. Therefore their interest to produce is continuously declining.

The interest of this stock exchange will enable farmers to sell their products directly, by being paid within twenty-four hours. It should also promote transparency and predictability in the domestic market.

Thus, in recent years, although the food crisis has pushed up prices of food products, producers have not benefited much. "When the average international price of commodities increases, the tendency is for larger businesses to benefit, and not for small farmers. For example, although the prices of coffee and cocoa have risen by 27% in 2003, coffee farmers have seen their share of a packet sold on supermarket' shelves down from 37% in the early '90s and between 6 and 8% in the new millennium. Cocoa producers get about 7% of the value supermarket" notes Infoshare, a project of technical support presented to the United Nations Conference on Trade and Development (CNUCED) to facilitate access to information to producers of goods, so that they'll be able to negotiate better rates and make their products more accessible and better paid.

Delay

To seduce and put to work the 900 000 small coffee and cocoa planters, Cameroon, with the support of CNUCED, will launch a stock of commodities in Central Africa, which will be based in Yaoundé.

The interest of this stock exchange will be to allow farmers to sell their products directly, by being paid within twenty-four hours. This should also promote transparency and predictability in the domestic market as well as help selling Cameroon' agricultural products directly on the global market. It will also provide warehousing, real-time information on the market and quality control.

The concentration of trade in commodities in one place reduces transaction costs, thereby making these products competitive, said Nkoulou Ada, the Cameroon Ministry of Commerce. "In this context, small producers of raw materials could perceive more accurate and fairer prices in exchange for their products", he believes strongly.

The electronic platform of the commodities exchange will facilitate integration in Central Africa.

Infocomm, the Internet portal of CNUCED, which provides free information about prices, products and markets in twenty sectors of goods, will be used now by about 12 to 15 million people worldwide, of which 60% are from the developing countries. This fact alone can make optimistic the Cameroonian authorities.