18.04.2024, 16:45
Russia has submitted a proposal to the BRICS countries to create a grain exchange
Source: OREANDA-NEWS
OREANDA-NEWS Russia has presented an initiative to BRICS partners to create a grain trading platform for the association, the Roscongress press service reported after the first meeting of the BRICS working group on agriculture, which was held via videoconference.
In addition, the meeting announced a conference on food security and sustainable agricultural development, which is scheduled for the end of June in Moscow.
"Foreign partners welcomed the initiatives and planned events of the Russian presidency and noted the importance of strengthening multilateral cooperation in the agricultural sector," the press release says.
"The start of the discussion of the grain exchange project at the BRICS site took place. The final decision will depend solely on the political authorities of the participating countries, but bringing your proposal to colleagues from agricultural ministries is definitely an important step," Chairman of the Board of the Grain Exporters Union Eduard Zernin told Interfax.
In early March, at a meeting with representatives of the agro-industrial complex in the Stavropol Territory, President Vladimir Putin supported Zernin's proposal to create a BRICS grain exchange and promised to work on it with partners. The Union of Grain Exporters outlined this idea in a letter to the Ministry of Agriculture in December 2023.
In a letter to the Ministry of Agriculture, the Union justified its proposal by saying that the modern infrastructure of the global grain market developed after World War II with the dominance of wheat and corn supplies from the United States. Market benchmarks used by the BRICS countries, among others, are formed on the basis of quotations of grain crops on the Chicago Stock Exchange (CME). The clearing currency is mainly the US dollar.
"The BRICS countries, being key participants in the global grain market, cannot fully participate in the formation of prices for such basic agricultural products important for their food security and economy as wheat, barley and corn, world prices for which are formed, and often manipulated, in third countries," the authors of the letter noted.
The answer to the situation may be the formation of a unified BRICS trade and clearing infrastructure, within which grain exchange trading between companies of the member countries of the association will be carried out. "Russia has accumulated unique experience in creating high-tech, productive and reliable exchange trading and clearing platforms (for example, the Moscow Exchange Group). In addition, we have accumulated extensive experience in the field of exchange technologies in terms of commodity exchange markets, experience in organizing settlements in the currencies of the BRICS countries and the admission of participants from different countries to a single exchange trading and clearing infrastructure", - the letter said.
According to the calculations of the Union, the BRICS five countries at the end of 2023 produced 1.17 billion tons of grain per year (42% of world production), and consumed 1.1 billion tons (40% of world consumption). The group's countries account for 348 million tons of wheat harvest per year (44% of global production), consumption - 323 million tons (41%). Corn production, which is mainly used for animal feed, reaches 482 million tons (39%), consumption - 442 million tons (37%).
After the expansion of the BRICS on January 1, 2024, due to new countries, grain production in the association will reach 1.24 billion tons per year (44% of the world), consumption will be as close as possible to production - 1.23 billion tons (also 44%).
The situation will be similar for wheat: production is 377 million tons (48%), consumption is 374 million tons (47%). Corn production will reach 501 million tons, consumption - 484 million tons. Both indicators account for 40% of the global value.
In addition, the meeting announced a conference on food security and sustainable agricultural development, which is scheduled for the end of June in Moscow.
"Foreign partners welcomed the initiatives and planned events of the Russian presidency and noted the importance of strengthening multilateral cooperation in the agricultural sector," the press release says.
"The start of the discussion of the grain exchange project at the BRICS site took place. The final decision will depend solely on the political authorities of the participating countries, but bringing your proposal to colleagues from agricultural ministries is definitely an important step," Chairman of the Board of the Grain Exporters Union Eduard Zernin told Interfax.
In early March, at a meeting with representatives of the agro-industrial complex in the Stavropol Territory, President Vladimir Putin supported Zernin's proposal to create a BRICS grain exchange and promised to work on it with partners. The Union of Grain Exporters outlined this idea in a letter to the Ministry of Agriculture in December 2023.
In a letter to the Ministry of Agriculture, the Union justified its proposal by saying that the modern infrastructure of the global grain market developed after World War II with the dominance of wheat and corn supplies from the United States. Market benchmarks used by the BRICS countries, among others, are formed on the basis of quotations of grain crops on the Chicago Stock Exchange (CME). The clearing currency is mainly the US dollar.
"The BRICS countries, being key participants in the global grain market, cannot fully participate in the formation of prices for such basic agricultural products important for their food security and economy as wheat, barley and corn, world prices for which are formed, and often manipulated, in third countries," the authors of the letter noted.
The answer to the situation may be the formation of a unified BRICS trade and clearing infrastructure, within which grain exchange trading between companies of the member countries of the association will be carried out. "Russia has accumulated unique experience in creating high-tech, productive and reliable exchange trading and clearing platforms (for example, the Moscow Exchange Group). In addition, we have accumulated extensive experience in the field of exchange technologies in terms of commodity exchange markets, experience in organizing settlements in the currencies of the BRICS countries and the admission of participants from different countries to a single exchange trading and clearing infrastructure", - the letter said.
According to the calculations of the Union, the BRICS five countries at the end of 2023 produced 1.17 billion tons of grain per year (42% of world production), and consumed 1.1 billion tons (40% of world consumption). The group's countries account for 348 million tons of wheat harvest per year (44% of global production), consumption - 323 million tons (41%). Corn production, which is mainly used for animal feed, reaches 482 million tons (39%), consumption - 442 million tons (37%).
After the expansion of the BRICS on January 1, 2024, due to new countries, grain production in the association will reach 1.24 billion tons per year (44% of the world), consumption will be as close as possible to production - 1.23 billion tons (also 44%).
The situation will be similar for wheat: production is 377 million tons (48%), consumption is 374 million tons (47%). Corn production will reach 501 million tons, consumption - 484 million tons. Both indicators account for 40% of the global value.
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