SECP Plans New System to Help Farmers Directly Sell Crops to Buyers on PMEX

The Securities and Exchange Commission of Pakistan (SECP) Chairman Dr. Kabir Ahmed Sidhu has directed the Pakistan Mercantile Exchange (PMEX) to prepare a practical roadmap for launching physically deliverable agricultural futures contracts, aiming to modernize commodity trading and improve price discovery for farmers.

During a meeting with the PMEX board and senior management, Sidhu said the contracts should be backed by an integrated Electronic Warehouse Receipt system with real time connectivity between warehouses and the exchange. He noted that such a framework would help create transparent and efficient markets for farmers, traders, and processors.

Physically deliverable futures contracts require sellers to deliver the underlying commodity at contract expiry, unlike cash-settled contracts that are settled through price differences. The mechanism is widely used in mature commodity markets to improve market transparency, facilitate access to formal financing, and reduce inefficiencies in agricultural supply chains.

PMEX management briefed the chairman on ongoing efforts to expand futures trading in key agricultural commodities. Sidhu said modernizing commodity market infrastructure remains a priority for the SECP and called for innovative products and broader market participation to unlock the sector’s potential.

Separately, the SECP chairman visited the National Clearing Company of Pakistan Limited, where officials briefed him on clearing and settlement operations, risk management systems, and future initiatives aimed at strengthening Pakistan’s capital market infrastructure.