UK: New commodity exchange for organic food to be unveiled
BT's Syntegra technology division is to build an electronic market that it is hoped will help farmers in the third world get a better deal when selling to Western buyers.
The exchange, which is expected to be launched in the autumn, is being set up by Teemco, a private company operated by former derivates trader John Lodge. Lodge explained that farmers in developing countries should be able to get better prices than they currently achieve, given that the demand for organic food outstrips supply, and the market is reporting annual growth of 20%. It is believed that the European market for organic food is worth more than £10bn (US$14.2bn) and the exchange aims to see producers in developing country benefit from this growth.
The exchange will give producers a new outlet, rather than relying exclusively on supermarkets sending buyers to see them. While suppliers and supermarkets are still likely to make unilateral, undisclosed agreements, it is hoped that the exchange will give the farmers more power.
Teemco is funded by large City ethical funds and will pay for itself by taking a commission on trades. It will be mutually owned by the producers and purchasers who use it. Teemco is currently working on a marketing campaign directed at getting African farming bodies and cooperatives on board.
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