Commodity Exchanges are marketplace where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts. This marketplace usually trades futures contracts on various commodities such as agricultural products(like wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, etc.), metal ,energy and other sophisticated products may include interest rates, environmental instruments, swaps, or ocean freight contracts. In each contracts, there is a specification of quality, quantity, expiry date and price which bases on the prevailing market price. Most importantly, each transaction is guaranteed under the rules and regulations (BYELAWS) specified by the Exchange. 

For example: A farmer raising corn can sell a future contract on his corn, which will not be harvested for several months, and guarantee the price he will be paid when he delivers; a breakfast cereal producer buys the contract now and guarantees the price will not go up when it is delivered. This protects the farmer from price drops and the buyer from price rises.

Although some historical evidence suggests that a crude form of commodity futures trading began over 6,000 years ago in China, that claim is very difficult to prove; the first recorded instance of commodity futures trading occurred over 300 years ago in seventeenth-century Japan. In 1730, the feudal government of Tokugawa in Japan established the Dojima Rice Market/Exchange in Osaka at the request of rice merchants who wanted to stabilize the price for rice.

As a way to generate needed cash, farmers sold “rice tickets” that demonstrated the ownership of stored rice. Soon afterward standardized contracts were developed that represented specific quantities and qualities of rice for a predetermined price.

In 1848 the first commodity exchange in the United States was established in Chicago by 82 businesspeople seeking to make the marketplace for certain commodities more efficient. The Chicago Board of Trade (CBOT) was born and provided a formal and central meeting place for both farmers and merchants. The earliest form of trading at the CBOT was called spot trading. This involved farmers selling their products to the highest bidding merchants on the spot.

Merchants had to store vast quantities of product during the peak harvesting months and thus incur higher costs and more volatile prices. Prices declined during the peak harvesting months, when supply was high, and advanced during off-peak months, when supply was very low. The To-arrive contract was established in 1849 in order to solve such problem. This contract permitted farmers and merchants to transact a product at today’s prices but not exchange the product until a certain date during the year. The result of the to-arrive contract was less product with the merchant and lower price volatility. Over time the to-arrive contract was standardized to meet the needs of the majority of farmers and merchants and was renamed the futures contract.

Mex Cambodia being the first and only Commodity Futures Exchange in Cambodia can take pride of bringing superior technology to Cambodia to work and firm support from the financial and software related institutions.

Cambodian Mercantile Exchange PLC (Mex Cambodia) is a zero-debt company; following widely accepted prudent accounting and auditing practices. The day-to-day operations of the Mex Cambodia are controlled and managed by experienced and qualified professionals with impeccable integrity and expertise.

Mex Cambodia fosters Cambodian Derivatives Clearing House PLC, an independent entity for clearing and settlement of all trades happening in the Exchange.

The Exchange is also planning to keep a robust delivery mechanism making it the most suitable for the participants in the physical market or cash markets. Mex Cambodia does not compromise on its delivery provisions to attract speculative volume. The public interest rather than commercial interest guides the functioning of the Mex Cambodia. Mex Cambodia has established fair and transparent rule-based procedures and demonstrated total commitment towards eliminating any conflicts of interest.

Our R&D department is constantly in the process of identifying the hedging needs of the import-export sector and the basket of future commodity products offered are likely to double even further in a short span of time. On the public side, Mex Cambodia is making strides and has made immense contribution in raising public awareness about and catalyzing implementation of policy reforms in the commodity futures market segment.

With all its expertise Mex Cambodia is also executing its plans in Cambodia to introduce robust warehouse receipt system within the existing legal and regulatory framework. Mex Cambodia is the first and only Exchange in Cambodia as of now, to complete the contractual groundwork for dematerialization of the warehouse receipts.