The Department of Agriculture and the Philippine Stock Exchange (PSE) have teamed up to start the process of reviving the country’s commodities futures market after the first one turned out to be a sham and collapsed over 20 years ago.

Agriculture Secretary Arthur Yap and PSE president Francis Lim signed a memorandum of agreement last Friday to so they can work together to prepare everything necessary for the electronic trading of spot commodities and, eventually, commodity futures.

The agreement states that the PSE and DA will work on a trading system that will link Filipino agriculture farmers to profitable markets for their products.

The PSE and the DA are exploring several commodities to be traded at the proposed exchange such as rice, corn, sugar and copra.

Under the agreement, the assistance to be provided by the DA will include support for the enactment of laws, rules and regulations and circulars necessary to create an enabling environment for an organized commodity market for agricultural commodities.

Lim said it is also the task of the PSE to come up with rules and guidelines that will ensure that trading is transparent and legitimate to earn the trust of the public which may still bear a negative impression of the commodities bourse because of past experiences.

He added that the proposed Agricultural Commodities Exchange (ACE) will be distinct from equities trading but will use the PSE’s new automated trading system which has the capacity to accommodate commodities trading.

Lim said ACE may be put up as a unit of the PSE or as a separate company co-owned by the PSE and the government since it will need the warehouses of the NFA which Yap said numbers about 500 nationwide.