Grain SA protests JSE's soybean pricing decision

Grain SA and partners staged a march on Thursday to the Johannesburg Stock Exchange (JSE) to oppose the JSE’s decision to return to a single soybean reference point system, a decision that would put more strain on farmers.

Grain SA and partners marched on Thursday to the Johannesburg Stock Exchange (JSE) to oppose the bourse’s decision to return to a single soybean reference point system, a decision that would put more strain on farmers with a ripple on effect as soybeans is used for feed for farmers in the livestock industry.

Grain SA said that they were disappointed with the decision to abandon the Multiple Reference Point (MRP) model for calculating soybean location differentials.

Grain SA said that they want a fair and transparent soybean price discovery. “Leadership, board members and producers participated in a peaceful march through Sandton before the documents were handed over to JSE representatives at its offices in Gwen Lane. The petition, supported by 965 signatures and 511 supporting comments, calls on the JSE to reconsider its decision, conduct a transparent and evidence-based review, and adopt a price-discovery system that better reflects actual grain movements and physical market realities.”

Richard Krige, Chairperson of Grain SA, said that producers made their position clear in a peaceful but firm manner.

“This is not simply about one reference point. It is about whether the system reflects the realities of the physical market and whether producers can have confidence that decisions affecting their businesses are based on transparent evidence.”

Grain SA and partners staged a march on Thursday to the Johannesburg Stock Exchange (JSE) to oppose the JSE’s decision to return to a single soybean reference point system, a decision that would put more strain on farmers.

Grain SA added that they remain concerned that the decision to reject the Multiple Reference Point model was not supported by sufficient quantitative evidence and that the agreed evaluation criteria were not adequately addressed.

Grain SA said a return to a single reference point could lead to transport-related deductions primarily based on distance from that point, rather than adequately accounting for regional supply, demand, and the actual movement of soybeans. Public protest marches about financial market regulatory changes are very rare in South Africa.

“The organisation is continuing with its technical submissions, engagement and proceeding with legal action, including an urgent application aimed at preventing implementation of the decision while the matter is challenged through appropriate processes aimed at protecting producer interests and securing a more efficient and transparent outcome.”

Wandile Sihlobo, Chief Economist, Agricultural Business Chamber of South Africa, said that Grain SA’s call for a fair approach to soybean price discovery is an important matter that the JSE should consider.