October 20, 2010
PHNOM PHEN (Commodity Online) : More than three months after its scheduled opening date, Cambodia’s only commodity exchange remained shelved as authorities failed to draft regulations to govern the exchange.
The privately-owned Cambodian Mercantile Exchange was due to launch on July 30 and begin online trading of 11 commodities by mid-August.
CMEX officials have repeatedly declined to comment on the reasons for the delay.
However, Securities and Exchange Commission of Cambodia (ECC) said the exchange could not open until the regulations to govern it were in place.
In a statement ECC said it asked the CMEX not to operate because we need the regulations to be set up first and they need to apply for the regulation.
Once regulations were created, it said, related ministries, such as the Ministry of Agriculture, would need to be consulted before a final draft was available.
Analysts said despite the apparent delay, the CMEX would have a positive impact once established.
“Cambodia has never had a commodities exchange before, and it’s getting by without it, but it would be good to have one at some time in the future as the agriculture market develops,” they said
A mercantile exchange helps to monitor and regulate the price of the goods being traded by setting a market price for goods based on broader supply and demand.
Commodity traders usually use futures contracts, which can help farmers because they can hedge the cost of their produce when they know the future price they will receive for their goods on delivery.
CMEX said in July that, initially, 11 commodities would be listed on the Kingdom's exchange.
These were gold, silver, cotton, crude oil, heating oil, natural gas, soya-bean oil, soya beans, wheat, copper and coffee.