People from all over the world will come to Moscow for bread
At the first meeting of the BRICS working group on agriculture, Russia presented its proposals to its partners for creating a grain exchange within the framework of this association. Thus, the discussion of a new trading platform began, the benefits of which for the participating countries are beyond doubt. But from idea to implementation, according to experts, there is a long way to go.
The topic of a grain exchange for BRICS was first voiced in early March in the Stavropol Territory, where Vladimir Putin met with farmers. What doesn’t suit Moscow and the BRICS member countries about today’s grain trading system? Quotations of grain crops are mainly formed on the Chicago Stock Exchange and in Europe.
And the BRICS countries (in addition to the main ones — Brazil, Russia, India, China and South Africa, this also includes Saudi Arabia, Iran, the UAE, Egypt and Ethiopia) seem to have nothing to do with this market. Although among them there are both large grain producers and large consumers. So, at the end of last year they produced 1.17 billion tons of grain – 42% of world production, including 350 million tons of wheat.
At the same time, being key players in the world grain market, the BRICS countries cannot fully participate in the pricing policy for such important crops as wheat, barley and corn.
It is worth separately noting the fact that Russia, which in recent years has become a world leader in grain exports, needs new, additional markets. According to forecasts, buyers not only from the BRICS association will come to the exchange, but also from other countries interested in purchasing high-quality Russian crops.
The association's partners support the creation of such an exchange. Theoretically, no problems should arise. Russia has considerable experience in creating modern and reliable exchange platforms, as well as in the field of exchange technologies and settlements in national currencies.
By the way, today the question of national currencies that will participate in calculations is important. Are they beneficial to the Russian economy? After all, it is known that in some friendly countries there is high inflation. Does it make sense for our economy to accumulate illiquid reserves? And who should buy or sell in what monetary units? These and other nuances of the project will have to be resolved during the ongoing negotiations.
According to Doctor of Economic Sciences, expert on agricultural issues Dmitry Valigursky, the market today is unbalanced, members of the BRICS association are helping each other out with their national currencies and it is right that we are switching to internal mutual settlements.
— This situation is temporary, it is connected with tough economic sanctions against our country,” the expert believes. – The Moscow Exchange can bring stability to the work of the domestic agro-industrial complex; the manufacturer will have confidence that the products he grows will not sit in warehouses, but will be sold through the exchange, without any additional costs.
We ask the candidate of economic sciences, presenter of the program “Rural Hour” Igor Abakumov, will the new grain trading platform help export the 65 million tons of grain that the president previously spoke about?
“It will help in the future, but not this season,” he explains. — There are too many details to be discussed during the negotiations – interdepartmental and interstate. From harmonizing the laws of the participating countries to the terms of mutual settlements. It is difficult to trade grain; it has too many characteristics. These are not metal or cars, but biological products. As such, the product “grain” not on the stock exchange at all. There are products of a certain category. There is a certain grain collected from a specific field and with certain characteristics according to quality standards, grade and other parameters. All this is classified, but it takes a lot of time.
— The futures option is being discussed, as opposed to the Chicago one. This is our answer to them: put the hedgehog in Uncle Sam's pants.