Russia is in the final stages of developing a concept for an inter-BRICS grain exchange, with plans to present it to other member countries soon, as outlined by Russian deputy agricultural minister Maxim Markovich during the St. Petersburg Economic Forum in June.
Reducing Reliance on Western Markets
Markovich emphasized that the proposal for a grain exchange has garnered support from all BRICS members. The initiative comes as Russia intensifies its efforts to establish a centralized grain trading platform among the bloc’s ten emerging economies.
Russian Agriculture Minister Dmitry Patrushev indicated during a press conference that the grain exchange is designed to decrease reliance on “Western trade platforms” and to foster the development of essential infrastructure aimed at enhancing market efficiency.
Advocating for Fair Pricing
According to Patrushev, the establishment of the exchange could result in the setting of ‘fair prices’ on the global market, thereby bolstering food security and providing a more balanced trading environment. Nevertheless, some experts have expressed skepticism, suggesting the initiative may inadvertently lead to higher prices.
“Simply put, the aim of such an exchange is to create a cartel akin to OPEC, which has historically maintained elevated oil prices through coordinated efforts among exporting nations,” commented Alexander Dynkin, a member of the Russian Academy of Science.
Significant Market Share at Stake
Estimates from the Russian Union of Grain Exporters suggest that the proposed BRICS grain exchange could control as much as 30-40% of global trade in crucial grain crops. For context, BRICS nations collectively produce approximately 348 million tonnes of wheat annually, which accounts for about 44% of the world’s total production.
Feasibility and Concerns
Although Russian officials assert that there is support for the BRICS exchange among member nations, certain reports indicate hesitation regarding the practicality of the project. It remains uncertain why other BRICS countries, many of which are net grain importers, would endorse a scheme that could maintain elevated grain prices.
Food Access and Sovereignty
Kristina Bakonina, vice president of ACI Russia, remarked in an interview with Izvestia that the grain exchange could offer importing nations, including China, India, Egypt, South Africa, and Brazil, a more predictable and dependable food supply. She asserted that this initiative could enhance the union’s economic sovereignty and resilience against external pressures.
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