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- The GPW Group consortium has signed a memorandum of understanding with Elewarr to develop a system of warehouses authorised for the storage of grains traded on the Food Platform based on the grain silos owned by Elewarr and its subsidiaries
- Authorised warehouses guarantee and execute the clearing of transactions in commodities on the agricultural exchange
- The launch of the Food Platform is a key strategic project supporting the development of Poland’s agriculture
- The creation of an agricultural exchange, part of the government’s Strategy for Responsible Development, is a key initiative under #GPW2022
A memorandum of understanding concerning the Food Platform project has been signed at Zamojskie Zakłady Zbożowe in the presence of Deputy Prime Minister Jacek Sasin, Minister of Agriculture and Rural Development Jan Krzysztof Ardanowski, Undersecretary of State at the Ministry of Treasury Leszek Skiba, President of GPW Marek Dietl, President of Elewarr Daniel Korona, and representatives of the National Centre of Support for Agriculture (KOWR).The objective of the memorandum is to develop a system of warehouses authorised for the storage of grains traded on the agricultural exchange building on the grain silos owned by Elewarr and its subsidiaries. The parties will consult proposed regulations concerning the functioning of the food and agricultural exchange, and they will exchange experience and expertise concerning the operation of grain silos, the storage of grains, and trade in food and agricultural commodities.
The press conference was opened by Deputy Prime Minister Jacek Sasin who stressed the importance of the development of Polish agriculture for the entire economy:
“The creation of the Food Platform will largely strengthen the position of Polish farmers as an important part of the Polish economy and improve the transparency of economic transactions. Polish agriculture and Polish farms could be a driver of economic growth in Poland. This is why the launch of the platform is a step in the right direction which opens an opportunity for genuine improvement of the position of both farmers and consumers,” said Deputy Prime Minister Jacek Sasin.
The Food Platform is a pioneering project aiming to modernise Polish agriculture:
“The Food Platform will be dedicated mainly to producers of grains and other durable goods which can be stored for a long period of time and which are traded on the leading global exchanges including Chicago and Paris. Such products will be traded on the Polish exchange, as well. The creation of the Platform will improve the concentration of supply of local food and agricultural commodities. I believe it is important that the exchange will offer forward contracts which provide transactional pricing of produce that will be available in several months,” said Minister of Agriculture and Rural Development Jan Krzysztof Ardanowski.
The launch of the Food Platform is a part of the government’s Strategy for Responsible Development:
“The Food Platform will enable farmers to generate bigger earnings from agricultural production. While a large part of profits is currently captured by intermediaries, GPW’s initiative will allow farmers to have a bigger participation in margins. The Food Platform can bring down the prices of agricultural products paid by end consumers,” said Undersecretary of State at the Ministry of Treasury Leszek Skiba.
In the project launching the Food Platform, the GPW Group has conducted a feasibility study and drafted operating documents which define the organisation of the agricultural exchange. The project pilot will offer trade in one agricultural product: consumption wheat. An underlying market with physical delivery will be established first while the launch of a forward market will be considered at a later stage.
“The GPW Group is running a project to launch an agricultural exchange. The pioneering project is managed by a team of experts in trading on the financial and commodity market, and it proceeds according to plan. We will open trade in agricultural commodities in Q2 2020,” said Marek Dietl, President of the GPW Management Board. “We have developed solutions to ensure that state-of-the-art mechanisms offered on the capital market can serve the Polish agriculture. I would like to thank GPW Group experts from GPW, the Polish Power Exchange (TGE) and the Commodity Clearing House (IRGiT) for the efficient implementation of this project which is so important for Poland,” added Mr Dietl.
An agreement with Elewarr which provides for the development of a network of authorised warehouses is a key element of the market architecture:
“The establishment of a system of Authorised Warehouses dedicated to the storage of grains traded on the Food Platform, building among others on the grain silos owned by Elewarr, opens new opportunities for Polish grain producers and represents the first step in the development of a food and agricultural commodity exchange. The opportunity allows farmers, on the one hand, to sell standardised agricultural commodities on the exchange and, on the other hand, introduces objective prices in relation to the expectations of farmers and other exchange traders. Elewarr not only intends to participate in the launch of the grain exchange but it is also planning to trade in grains using the services offered by the new food platform,” said Daniel Alain Korona, President of the Management Board of Elewarr Sp. z o.o.
GPW, IRGiT and Authorised Warehouses are the pillars of the Food Platform. A network of authorised warehouses, which will eventually become nation-wide, is key to the physical settlement of transactions with delivery. The authorised warehouses will be responsible on the agricultural exchange for the verification and quality of stored commodities in trading on the exchange, keeping records of commodities, clearing of transactions in commodities, and the physical delivery of commodities. IRGiT will be responsible for collateral management and financial clearing. Elewarr will be responsible for managing the flow of food and agricultural commodities.
The Ministry of Agriculture and Rural Development has appointed its executive agency KOWR as the implementing co-ordinator of the Food Platform project. KOWR is the leader of a consortium comprised by the Institute of Agricultural and Food Economics and the Institute of Agricultural and Food Biotechnology. The project is co-financed under the GOSPOSTRATEG programme by the National Centre for Research and Development.
