The Union of Grain Exporters proposed to the Ministry of Agriculture to create a BRICS grain exchange

The Union of Grain Exporters, within the framework of Russia’s chairmanship of BRICS in 2024, proposed creating a grain exchange for this association of countries that are the world’s largest producers and consumers of grain. The Union sent a letter with this initiative to the head of the Ministry of Agriculture, Dmitry Patrushev.

The letter, excerpts from which Interfax provides, notes that the BRICS countries account for 40% of world grain production and consumption. Every year, BRICS members – Brazil, Russia, India, China, South Africa – produce more than 1 billion tons of grain. Taking into account the expected entry into BRICS of new member countries, in particular, Saudi Arabia, the UAE, Egypt, Iran, and Ethiopia, the influence of BRICS on the world grain market will grow even stronger, the author of the letter indicated.

At the same time, the Union noted that the modern infrastructure of the world grain market developed after the Second World War, when the main supplier of wheat and corn was the United States. Therefore, market benchmarks are formed on the basis of grain quotations on the Chicago Exchange (CME), and the US dollar is mainly used as the clearing currency. In this regard, the Union emphasized, the BRICS countries “cannot fully participate in setting prices for basic agricultural products, and are often subject to manipulation in third countries.”

A unified trade and clearing infrastructure, within the framework of which grain exchange trading will be carried out between companies of the BRICS countries, will help eliminate the problem, the authors believe. “Russia has accumulated unique experience in creating high-tech, productive and reliable exchange trading and clearing platforms. In addition, we have accumulated a wealth of experience in the field of exchange technologies in terms of exchange commodity markets, experience in organizing settlements in the currencies of the BRICS countries and in admitting participants from different countries to a single exchange trading and clearing infrastructure,” the letter emphasizes.

According to the Institute for Agricultural Market Studies (IKAR), the grain harvest in Russia (excluding the harvest in annexed territories) by the end of 2023 could amount to 144 million tons. Rosstat expects the figure to be slightly lower – 142.6 million tons. Moreover, both figures are noticeably lower than the record level of last year, when 157.6 million tons of grain were harvested in Russia.

More details in material “Ъ”.

Milena Kostereva