Grain SA has criticised the Johannesburg Stock Exchange’s decision to abandon a new soybean pricing model, warning that it could leave farmers at a disadvantage.
South African agricultural organisation Grain SA has expressed disappointment over the Johannesburg Stock Exchange’s (JSE) decision to scrap the Multiple Reference Point (MRP) model for calculating regional soybean location differentials.
The organisation said the move would preserve an opaque pricing system that fails to address information asymmetry in the market, leaving key market data in the hands of a limited number of industry participants.
“The concentration of soybean processing capacity and the resulting imbalance in market power also contribute to information asymmetry. Where critical market information is held by a limited number of participants, producers are placed at a disadvantage and the transparency and competitiveness of the market may be compromised,”
Grain SA said in a statement.
According to Grain SA, the MRP model was developed specifically to address these challenges. The methodology was designed to account for regional differences and provide a more accurate and transparent approach to soybean price formation after a two-year pilot.
The JSE said it decided to return to the existing single reference point system after identifying “structural and operational limitations” in the MRP model, including difficulties in obtaining reliable and auditable soybean crushing data. The exchange also said that not all market participants considered the new methodology sufficiently simple, clear or practical.
Grain SA, however, argued that the JSE placed too much emphasis on data availability challenges and did not fully consider the broader benefits of the model. The organisation said soybean processing data could be provided in an aggregated and confidential format without revealing commercially sensitive information from individual companies.
The farming body added that such information is already collected under the Marketing of Agricultural Products Act and could be used to support a fairer calculation of regional soybean location differentials.
Grain SA said farmers are operating under growing input costs, low profitability and significant production risks. The organisation warned that maintaining a less transparent pricing system could result in further losses for producers already facing financial pressure.
“[Such a system] may also create opportunities for value-chain role players to abuse market powers for their own benefit. These distortions become particularly concerning where concentrated market power and access to information could influence physical delivery patterns and basis formation to their advantage. These distortions become particularly concerning in a market characterised by concentrated processing capacity and unequal access to commercial information,”
Grain SA said.
The JSE has announced that it plans to return to a single reference point from 1 March 2027. Market participants have been invited to submit comments on the proposal by 14 August 2026.
Grain SA said it would continue to advocate for a location differential methodology that is transparent, evidence-based and equitable to all market participants.
Source: Business Report, Grain SA
