Russia is considering the possibility of creating a BRICS grain exchange

The updated BRICS strengthens its position on several fronts at once. Russia plans to create a common grain exchange. This will strengthen the importance of Moscow as a key supplier and increase the food security of the interstate association. In addition, it transforms international trade, and not in favor of Western manufacturers.

At the end of last year, the Union of Grain Exporters appealed to the Ministry of Agriculture.

The modern infrastructure of the world market developed after World War II, when the United States was the main supplier of wheat and corn, industry representatives pointed out. In this regard, market benchmarks are guided by the quotations of the Chicago Stock Exchange (CME), and dollars are mainly used as the key currency. As a result, the BRICS members "cannot fully participate in the formation of prices for basic agricultural products." And they face manipulation by third countries.

At the same time, the largest producers and consumers of grain are in the BRICS. Russia alone accounts for 20-25% of global trade.

According to the estimates of the Union of Exporters, the five countries of the "old" BRICS represent 40% of the global grain market. Total production is 1.17 billion tons, consumption is 1.1 billion. In January, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates joined the international organization. Now the figures are 1.23 and 1.22 billion, respectively.

The BRICS grain Exchange would bring together leading buyers and suppliers, Russian exporters stressed.
The initiative was supported by Vladimir Putin.


Economists admit that there really is a problem, the established order needs to be changed — both in the interests of Russia and taking into account the "grain potential" of the entire BRICS.

"When pricing on the trading platforms of the Golden billion countries, tools that are not related to civilized market mechanisms are used: preliminary collusion of resellers, dumping of false information through controlled media and other manipulations. These are the modern realities. The new exchange will bring back competition, serve to decriminalize and develop a mechanism for fair pricing in the global market," says Khajimurad Belkharoev, associate professor at the Institute of World Economy and Business of the RUDN.

It is logical that countries with different living standards and volatility of national currencies decided to independently regulate internal relations based on clear and convenient rules, rather than relying on other people's tools, adds Anatoly Tikhonov, director of the Center for Agribusiness and Food Security at the Higher School of Economics of the Presidential Academy.

This will increase the food security of the BRICS participants, experts are sure.

The grain exchange will ease uncertainty and ensure supply stability in the face of global logistics disruptions and increasing food shortages, according to the South China Morning Post (SCMP).

"At the moment, the situation is as follows. Russia, China, and India supply grain, and the Chicago Stock Exchange forms prices for it. Moreover, due to sanctions, some countries can be banned from exporting. Alternative trading platforms will help to achieve justice," says Ekaterina Novikova, Associate Professor of the Department of Economic Theory at Plekhanov Russian University of Economics.

Source: Oreanda