{"id":870783,"date":"2026-08-19T10:32:55","date_gmt":"2026-08-19T08:32:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=870783"},"modified":"2026-08-19T10:32:58","modified_gmt":"2026-08-19T08:32:58","slug":"r20-billion-industry-goes-to-war-with-the-jse","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/870783\/r20-billion-industry-goes-to-war-with-the-jse\/","title":{"rendered":"R20 billion industry goes to war with the JSE"},"content":{"rendered":"\n

Grain SA is fighting back against the Johannesburg Stock Exchange’s (JSE) decision to revert to a single-reference-point system for soybean prices in the derivatives market.<\/p>\n\n\n\n

The soybean industry is a major part of South African agriculture, with 2022 yields estimated at approximately R20 billion, and it has continued to grow since then.<\/p>\n\n\n\n

The outrage follows the JSE’s adoption of a multi-reference-point model for the commodity on a trial basis, to be tested over two marketing seasons.<\/p>\n\n\n\n

On the commodities exchange, traders can invest in futures contracts for commodities such as soybeans, with a specified price for a future date.<\/p>\n\n\n\n

For farmers, the futures market is a way to protect themselves against sudden price drops, with a predetermined price set in advance of market fluctuations.<\/p>\n\n\n\n

For traders, it is a way to guarantee a price for a commodity in advance, avoiding potential future price increases due to higher demand.<\/p>\n\n\n\n

When calculating the futures price for a commodity, several factors are considered to ensure it accurately reflects the market price.<\/p>\n\n\n\n

Previously, futures prices for soybeans were calculated based on the assumption that they had to be processed in Randfontein, with different areas incurring different transport costs.<\/p>\n\n\n\n

Over time, several other processing facilities have opened, leading farmers to argue that the current method for calculating futures prices does not fairly represent the market.<\/p>\n\n\n\n

This led GrainSA to propose a multi-reference-point model, in which futures prices would differ based on each area’s unique expenses.<\/p>\n\n\n\n

The system was tested by the JSE, but the bourse eventually decided to revert to a single-reference-point model, removing the separate calculations for each area.<\/p>\n\n\n\n

The exchange said its decision was based on the difficulty of accurately tracking and auditing soybean crushing plants’ operations, along with several other factors.<\/p>\n\n\n\n

“The review highlighted several structural and operational limitations that undermined confidence in the MRP model,” the bourse said.<\/p>\n\n\n\n

The JSE was also concerned that the futures calculations were based on confidential supply and demand data, which often could not be disclosed.<\/p>\n\n\n\n

While the exchange conceded that trading volumes and open interest had increased, it argued that there was no concrete link between this and the new model.<\/p>\n\n\n\n

The response from farmers<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Initially, Grain SA proposed the multi-reference-point system to address the basis of futures contracts on the derivatives market.<\/p>\n\n\n\n

The basis refers to the difference between the actual selling market price and the futures price of a commodity.<\/p>\n\n\n\n

If the selling price is higher than the futures price, farmers on the derivatives market can lose out on potential earnings by being locked into a futures contract.<\/p>\n\n\n\n

Grain SA has argued that using its proposed system helps prevent this and provides a minimal basis for soybeans.<\/p>\n\n\n\n

In response to the JSE’s decision to revert to a single-reference-point model, Grain SA issued a statement disagreeing with the decision.<\/p>\n\n\n\n

“Grain SA is deeply disappointed by, and disagrees with, the decision by the JSE not to retain the Multiple Reference Point model,” it said.<\/p>\n\n\n\n

The group argued that the decision was not a fair assessment of the criteria which the exchange had previously laid out, which included: <\/p>\n\n\n\n

    \n
  • Trading activity, including volumes and open interest.<\/li>\n\n\n\n
  • The number of active market participants.<\/li>\n\n\n\n
  • The management and accumulation of stock in zero-differential areas.<\/li>\n\n\n\n
  • The redelivery of JSE silo receipts.<\/li>\n\n\n\n
  • Stakeholder feedback and market experience.<\/li>\n<\/ul>\n\n\n\n

    “Grain SA is concerned that the JSE\u2019s final decision and motivation do not provide sufficient and transparent, criterion-by-criterion reasoning against the agreed evaluation framework,” it said<\/p>\n\n\n\n

    On Thursday, 13 August, the group organised a demonstration at the JSE to protest the decision and deliver a petition against the move.<\/p>\n\n\n\n

    Grain SA also launched a court interdict against the JSE’s decision, seeking to overturn it regarding the reference point models.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Battle lines are being drawn on the streets and in court over soybean futures in South Africa.<\/p>\n","protected":false},"author":131,"featured_media":855449,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2089994286162964585","_sma_facebook_post_id":"191437357620492_2180541732766226","_sma_instagram_post_id":"18013004855927678","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[26207,26206,175,26208,26209],"class_list":["post-870783","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-derivatives-market","tag-grainsa","tag-jse","tag-randfontein","tag-soybeans"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/870783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/131"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=870783"}],"version-history":[{"count":17,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/870783\/revisions"}],"predecessor-version":[{"id":870890,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/870783\/revisions\/870890"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/855449"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=870783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=870783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=870783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}