About ACE 


The Agricultural Commodity Exchange for Africa (ACE) is a spot and forward market commodity exchange, meaning that all contracts require a physical delivery of commodities either immediately, or at a specified future date. 

 

Contracts on ACE will clearly specify commodity specifications. ACE has adopted widely used regional commodity quality standards as ACE standards for this purpose, to create a general reference point for trade in agricultural commodities. ACE is promoting the harmonisation of standards, but will trade using any specified quality specifications, until the market moves towards more harmonised quality standards. On ACE it is up to the buyer and seller to agree which quality specification to use and to specify these in the contract. 

 

ACE is promoting three main concepts of trade integrated into the ACE trading system.

 

Warehouse Receipt System

Depositors can deposit commodity in an ACE certified storage facility and receive a warehouse receipt. The receipt is the essential document in the system. The storage operator will guarantee that the quantity and quality stated on the receipt, is what the holder of that receipt will be able to collect at any given time. This gurantee enables the banks to finance the warehouse receipt with the underlying commodity as collateral; and gives the buyer of the warehouse receipt confidence that the commodity is in safe storage and that delivery is without the traditional risks.

 

A warehouse receipt is traded on ACE; a buyer deposits the contract value into the ACE Settlement Account and ACE will settle all outstanding liens, such as storage fees, finance and finance costs, before transferring the balance to the seller.

 

ACE Bid Volume Only (BVO) and Offer Volume Only (OVO) systems

The BVO system works like a real time reversed auction. It is designed for buyers of large quantities to retrieve a price discovery from the market before contracting suppliers. A buyer request ACE to place a BVO to buy with a certain quantity including all terms and conditions, but with no specified price. ACE notifies all registered suppliers and invites them to offer prices at a real time trade session. At the end of the session the buyer can select competitive offers and ACE will generate the contracts and settle the trade.    

 

The OVO is the exactly opposite where a seller request ACE to place an OVO to sell with a certain quantity including all terms and conditions, but with no specified price. ACE notifies all registered buyers and invites them to bid at a real time trade session. At the end of the session the seller can select competitive bids to buy and ACE will generate the contracts and settle the trade.   

 

Bid and Offer Matching

Anyone who wants to sell or buy agricultural commodities can contact ACE or an ACE certified broker to place an offer to sell or a bid to buy. All bids and offers can be seen on the live market  nformation screen. Select a bid or an offer and all details and terms and conditions will be stated.  All bids and offers are live and active and can be accepted online by ACE or an ACE certified broker to generate a binding contract.

 

ACE is generating real time market information from these bids/offers and contracts generated. This information is public and available to all. ACE disseminates the information through this website, daily trade reports on email and the ESOKO mobile market information system. Please contact ACE if you are interested in receiving this information.