Article
JSE daily storage rate probed
Published: 01/02/2024
In 2011, the Competition Commission (CC) found the Grain Silo Industry (GSI (Pty) Ltd) guilty of breaching the Competition Act, 1998 (Act 89 of 1998) by fixing the JSE’s maximum daily storage rate of the South African Futures Exchange (Safex). Since 2008, when the CC investigation started, the JSE has not received input from the GSI to assist in determining the JSE maximum daily storage rate.
In 2011, an independent consultancy was appointed to evaluate the base storage rate for 2012 to determine whether it reflected the actual cost of storage. Since 2012, the basic storage rate has been adjusted annually in line with the producer price index (PPI) of final manufactured goods. The consultancy’s evaluation of the base rate was the result of a survey of the entire industry, not just GSI members. Agbiz Grain has stressed the importance of the JSE assessing the base rate by capturing the relevant actual cost items that contribute to the cost of storage.
The Bureau for Food and Agricultural Policy’s report, Grain Storage Cost Definitions, is an attempt to highlight the importance of getting the JSE daily storage rate right. Agbiz Grain strongly recommends that the JSE also acquire the Nel and Schoeman (1991) research report carried out for the Maize Board. – Agbiz Grain