Case Study: Forward Contracts — How 3 Farmers Locked in Prices Before Planting
Cooperative: COJAZ
Exchange: MBC Commodity Exchange (WhatsApp-first)
Delivery: March 15, 2027 (post-harvest)
Blockchain: Block #54
The Challenge
Mozambican farmers sell at harvest when prices are lowest. Everyone harvests at the same time, supply floods the market, prices crash. Farmers accept whatever price the buyer offers because they need cash immediately. This is the single biggest reason farmers stay poor — they produce value but capture none of it.
The Solution
COJAZ listed forward contracts on the MBC commodity exchange BEFORE planting. A forward contract is a commitment to deliver a specific quantity at a specific price at a specific date. This means COJAZ knows their revenue before they plant.
The Three Contracts
| Contract | Crop | Quantity | Price (MZN/kg) | Delivery Date | Grade | |---|---|---|---|---|---| | COJAZ-FWD-MAIZE-001 | Maize (milho) | 6,000 kg | 28 | Mar 15, 2027 | Grade A | | COJAZ-FWD-RICE-001 | Rice (arroz) | 2,000 kg | 40 | Mar 15, 2027 | Grade A | | COJAZ-FWD-BEANS-001 | Beans (feijão) | 2,000 kg | 50 | Mar 15, 2027 | Grade A |
The Economics
- Total contracted volume: 10,000 kg
- Average price: 37.3 MZN/kg
- Estimated revenue: 373,000 MZN ($5,874 USD)
- Payment method: M-Pesa escrow (buyer deposits, released on delivery)
- Price discovery: Transparent on commodity exchange, not negotiated behind closed doors
Why This Matters
Without forward contracts: Farmer harvests → floods market → price drops to 15 MZN/kg → sells at desperation price → loses money.
With forward contracts: Farmer signs contract before planting → knows revenue in advance → plants with confidence → delivers at harvest → receives 28 MZN/kg → earns 87% more than spot market.
The Data
- Forward contracts listed: 3
- Total volume: 10,000 kg
- Price premium vs spot market: ~87% (28 MZN vs ~15 MZN at harvest)
- Delivery location: Muaquiua, Zambézia
- Escrow: M-Pesa (buyer deposits, agent confirms delivery, funds released)
- Blockchain logged: Block #54
Key Lesson
Price security is more important than yield. A farmer who produces 1,000 kg at 28 MZN/kg earns more than a farmer who produces 2,000 kg at 15 MZN/kg. Forward contracts let farmers plan. Planning is the difference between farming and gambling.
