Russia plans to create a grain trading platform with its BRICS partners. Alexey Ivanov, Director of the BRICS Competition Centre, commented on this initiative for Rossiya24 TV channel.
Russia has proposed to its BRICS partners to create a grain trading platform. The BRICS countries plan to take part in its creation and operation. The platform will trade foodstuffs in national currencies without a peg to the dollar.
"The main interest of our producers, our exporters is to ensure stable demand for Russian goods, to get away from price volatility, which, unfortunately, is very high in the global grain market, to get away from the problems of speculative pricing. Unfortunately, it is now dominating on the key global stock exchanges,"
noted the Director of the BRICS Centre.
The initiative was announced during the first meeting of the BRICS working group on agriculture, which was held on April 18 via videoconference. As reported, in early March at a meeting with representatives of the agricultural sector in the Stavropol region, Russian President Vladimir Putin supported the idea of creating a BRICS grain exchange, calling it very good, and promised to elaborate upon it with partners. The Union of Grain Exporters presented this idea in a letter to the Agriculture Ministry at the end of December last year.
"In the proposals voiced by the Union of Grain Exporters, I see the idea of creating a marketplace, a platform within which Russian agricultural producers, Russian exporters can interact with consumers in the BRICS countries, we are talking primarily about the newly joined countries, i.e. Egypt and the Middle East countries," Alexey Ivanov emphasized.
"The BRICS countries, being key participants in the global grain market, cannot fully participate in the formation of prices for economically fundamental and food security-essential products as wheat, barley and corn, world prices for which are formed, and often manipulated, in third countries," the authors of the letter to the Agriculture Ministry said.
The response to the situation might come by way of setting up a unified BRICS trading and clearing infrastructure, under the auspices of which exchange trading in grain between companies of the member countries of the association will be carried out.
According to the Union's calculations, as of the end of 2023, the five BRICS nations produced 1.17 billion tonnes of grain crops per year (42% of world production) and consumed 1.1 billion tonnes (40% of world consumption). The group's countries account for 348 million tonnes of wheat harvest per year (44% of world production) and 323 million tonnes (41%) of consumption. Production of corn, which is mainly used for animal feed, totaled 482 million tonnes (39%) while consumption stood at 442 million tonnes (37%).
After the BRICS membership expansion on January 1, 2024, grain production in the association will reach 1.24 billion tonnes per year (44% of global output), while consumption draws very close to production - 1.23 billion tonnes (also 44%).
In wheat, the situation will be similar: production will stand at 377 million tonnes (48%) and consumption at 374 million tonnes (47%). Corn production will stand at 501 million tonnes and consumption at 484 million tonnes. Both indicators represent 40% of global values.
