Turkish Mercantile Exchange Electronic Warehouse Receipt (EWR) Market Celebrates Its First Year
In the Turkish Mercantile Exchange, EWR traded value has doubled.
Turkish Mercantile Exchange Electronic Warehouse Receipt Market has completed its first year. In a period of one year, the trading value increased by 90%, reaching 8.7 billion Turkish Lira. Additionally, during the first seven months of 2020, there was a 65% increase in trading value compared to the same period in the previous year.
Turkish Mercantile Exchange Electronic Warehouse Receipt Market (TMEX EWRM) was launched on July 26, 2019, with the aim of bringing producers and consumers in the agriculture sector together on a centralized platform to support the stable growth of the agricultural sector and the economy. As it celebrates its first year, TMEX EWRM has achieved significant successes.
With the launch of TMEX, buyers and sellers from all over the country can now transparently and securely execute trading in the Electronic Warehouse Receipt Market (EWRM) through a single national electronic platform.
In its first year of operation, the TMEX EWRM, witnessed registered investors increase to over 70,000, with a trading value of 8.7 billion Turkish Lira realized through 145,335 orders, involving the exchange of 6.3 billion kilograms of products. The trading value increased by 90% year-over-year and during the first seven months of 2020, there was a 65% increase in trading value compared to the same period in 2019.
On an annual basis, a 90% increase was recorded in trading value, with a 65% increase in the first 7 months of 2020.
Since the launch of TMEX EWR Market on July 26, 2019, there has been an increase in transaction value, from 4.6 billion TL to 8.7 billion TL compared to the previous 12-month period. In the period of January to July 2020, the transaction value increased by 65% compared to the same period in 2019, rising from 3.4 billion TL to 5.6 billion TL.
The licensed warehousing capacity with an establishment permit increased to 17 million tons, along with 6 million tons of operational storage capacity.
The licensed warehousing system ensures the high-quality storage of agricultural products, and the widespread adoption of EWR encourages farmers to produce high-quality products, contributing to food safety. The food sector can obtain the necessary quality and quantity of inputs through EWR without the cost of building and operating storage facilities.
In the first year of the EWRM’s establishment, the licensed warehousing businesses obtained a license capacity of 16,999,742 tons, and the operational capacity reached 5,948,922 tons.
Contract farming solution to facilitate advance payment collection has been implemented.
TMEX introduced a solution to facilitate advance payment collection for contract farming on June 19, 2020 with the aim of promoting its adoption by market participants. Contract farming increases predictability in the food supply system, providing farmers with a stable source of income. Efforts to expand the adoption of this solution are ongoing.
Priorities for the Upcoming Period
– Completion of technological infrastructure investments with domestic and national software.
– Activation of Agricultural Commodity Market Intermediary Institutions.
– Commencement of transactions in Participation Finance in the Teverruk Market.
TMEX, with its goal to become a regional and global commodity exchange, is working to deepen the EWRM and increase liquidity by introducing futures contracts that reflect future price expectations. Investment in technological infrastructure is ongoing, with the first phase expected to be operational in 2021.
The creation of reference prices in the agricultural market through futures contracts is expected to contribute to the supply and demand balance.
In the coming period, the efforts towards the activation of agricultural commodity market intermediary institutions will gain momentum.
The establishment of the Teverruk Market based on EWR within the scope of 11th Development Plan (2019-2023) of the Presidency of Republic of Türkiye, focusing on participation finance, is part of short-term plans. This aims to provide a local solution to serve participation finance.
In the upcoming period, more effective integration of the licensed warehousing system into market mechanisms, broader utilization of EWRs, the introduction and widespread adoption of derivative instruments based on these products, as well as the expansion of trading values to further deepen the markets, will be achieved through collaboration with the Turkish Union of Chambers and Commodity Exchanges (TOBB), the Ministry of Trade, the Ministry of Agriculture and Forestry, the Ministry of Treasury and Finance, and other stakeholders.
For more detailed information about TMEX, you can visit our website at www.turib.com.tr.
Established in June 2018, TMEX engages in exchange activities including future trading of electronic warehouse receipts issued by licensed warehouses. TMEX collaborates with the Turkish Union of Chambers and Commodity Exchanges, the Turkish Ministry of Trade, the Turkish Ministry of Agriculture and Forestry, the Turkish Ministry of Treasury and Finance, and other stakeholders in areas such as the digitization of the food supply chain from farm to fork, the widespread use of electronic warehouse receipts, the development of contract farming and licensed warehousing.