Commodities Market Development Project

closed

The Commodities Market Development Project seeks to a) increase the marketing efficiency of grains and cotton through selected commodities exchanges; b) demonstrate the benefits resulting from increased private commodity marketing; and c) provide a model for development of other private exchanges, and impetus for governments to withdraw its intervention in the marketing of other commodities. The project consists of three components. First, modernization support to commodities exchanges will facilitate the financing of a range of eligible investments on a cost recovery basis at selected exchanges dealing with grain and cotton. Eligible investment categories are: training and technical assistance, laboratory and information technology equipment, and some civil works. Second, development of trading institutions and strengthening of oversight capabilities will consist of training and technical assistance to a) introduce nationally accepted, and internationally compatible quality grades for wheat and cotton; b) design and initiate the implementation of a warehouse receipt system; c) improve market surveillance and supervision of commodity exchanges; and d) assist in the establishment of a communication network linking commodity exchanges. Third, project impact evaluation will cover trade at participating exchanges, off-exchange trade within the catchment area of participating exchanges; and market integration and price convergence between participating exchanges.