KARACHI: Commodity producers across Pakistan will soon be able to directly sell their merchandise globally and receive payments promptly without having to register as exporters.
Speaking to Dawn, Pakistan Mercantile Exchange (PMEX) Managing Director Ejaz Ali Shah said the country’s only commodity futures exchange has set up a first-of-its-kind online marketplace under the name of Global Commodity Trading Platform (GCTP).
“The new platform will entirely eliminate the issues relating to customs, logistics and letters of credit. If you’re a rice seller, all you want to do is sell rice, not worry about certifications, customs, clearance, insurance and delivery,” said Mr Shah.
As a wholly-owned subsidiary of the PMEX, GCTP will operate somewhat like Amazon. But the new marketplace is for the international sellers and buyers of bulk commodities unlike Amazon that mainly caters to the retail clientele.
“It’s the first platform of its kind in the entire world. No one else is running such a service,” he said.
As an example, Mr Shah said, someone with 100 tonnes of Irri-6 rice will easily be able to register and log into the GCTP website and place a sell order along with product specifications and the per-tonne dollar rate. The counterparty sitting in a foreign country will book their required quantity, enter the date and place of delivery and put in the details through the logistics suite attached to the platform.
It’ll operate like a typical food-ordering portal. The buyer will “add-to-cart” the services they need, such as the container type and tracking and insurance features. Once the website shows the total price of the order, the buyer will deposit 20 per cent of its value to the GCTP. The PMEX subsidiary will then ask the supplier to deliver the merchandise at its bonded warehouse where customs inspection will take place for the promised grade and quantity. GCTP will issue a certification and send it to the buyer who’ll make the remaining payment.
“The export process takes three months at the moment. We’ll reduce it to just 28 days,” Mr Shah said.
But most importantly, the new platform will potentially cut out the so-called middle man from the value chain and connect the local producer with the international buyer with the click of a few buttons. “We worked on this project for three and a half years. It’s about to be rolled out now,” he said. In the first phase of its operation, GCPT will facilitate international trade of rice, guar gum, pink salt, dates, mango, peach and guava pulp, marble, gypsum, iron ore, barite and magnesite.
“We’ll do the first transaction in a few days,” he said while referring to a test deal in which two local and international parties will carry out a trade through the platform and the GCTP will execute the entire 28-day process.
“We’re developing a new class of commodity sellers, which will greatly increase our exports,” he said.
Published in Dawn, January 2nd, 2022