Alternatives to Full-Service National-Level Commodity Exchanges: Case Studies on ASERCA and PXAfrica
High-profile commodity exchange failures across Africa have illustrated that targeted enabling environment reforms, including food market liberalization, are critical. Nonetheless, where certain conditions are not yet present to support a full-service national-level commodity exchange, there may be alternative mechanisms for achieving similar market objectives.
This report profiles two alternative models: the Agencia de Servicios a la Comercialización y Desarrollo de Mercados Agropecuarios (ASERCA) program in Mexico, and the PanXchange trading platform in East Africa known as PXAfrica (PXA). The objective of the ASERCA program is to provide commodity price risk management for domestic producers, processors, and wholesalers. The objective of the PXA platform is to upgrade physical trade in agricultural commodities within and across Kenya, Tanzania, and Uganda. These models deliver some of the benefits of a commodity exchange yet may not need to meet all pre-conditions for a full-service national-level commodity exchange.
The report provides several key takeaways from the experiences of ASERCA and PXA for policymakers, development agencies, or private stakeholders seeking to address the objectives of upgrading physical commodity trade and/or facilitating commodity price risk management.