The HSE International BRICS Competition Law and Policy Centre, together with the Center for Industrial Development and Environmental Governance (CIDEG), held an international academic workshop, “Competition in Global Grain Value Chains,” at Tsinghua University in Beijing. The workshop was held as part of the annual Chinese National Fair Competition Conference, which was also attended by the BRICS Competition Centre.
The workshop was held as part of a sectoral study agreed upon by the BRICS competition authorities on the sidelines of the UN Conference on Competition in July this year. The discussion focused on the current state of global grain value chains, which are characterized by a high degree of financialization, the active adoption of digital platforms by dominant players, and “coopetition” (cooperation and competition) among the largest global traders, the ABCD+ companies. These factors had previously been analyzed in a report by the BRICS Competition Centre, which was presented in Cape Town last year.
In addition to representatives of the BRICS competition authorities, the discussion brought together prominent Chinese scholars from several leading universities, as well as representatives of UNCTAD, the Russian Ministry of Agriculture, and the business community.
Opening the workshop discussion, Chen Ling, Professor, Director, CIDEG, Tsinghua University, noted that the previous joint academic workshop had been held at Tsinghua in September 2023 and had focused on antitrust aspects of regulating the digital economy in the context of AI development. She also highly praised the BRICS Competition Centre’s report on competition issues in the global grain market.
“At a time when crises are spreading throughout the food supply chain, this work will provide a valuable starting point for a sectoral study of the grain market,”
Chen Ling emphasized.
The discussion moderator, Jia Kai, Vice Dean, School of International and Public Affairs, Shanghai Jiao Tong University, External Research Fellow at the BRICS Competition Centre, highlighted the complexity of the global grain trading system.
“As you noted in your report, the ABCD+ companies have built complex corporate groups within which capital and data are constantly being transferred. It is not entirely clear to what extent the companies themselves understand how this system operates as a whole, or whether they have a comprehensive view of how it may evolve in the future,”
Jia Kai noted.
In the photo: Chen Ling, Alexey Ivanov, Cui Zhiyuan © HSE University
Alexey Ivanov, Director, BRICS Competition Law and Policy Centre, Professor, HSE Law School, presented the Centre’s key findings at the workshop and outlined the main areas of work for the sectoral study of competition in the global grain trade market. In particular, he noted that the world’s largest grain traders now effectively operate as orchestrating agents of global food supply chains, shaping their development and the conditions of competition within them.
Vertical integration, digitalization, complex corporate structures and partnerships all play an important role in this process. However, Ivanov particularly emphasized financial instruments, which he described as one of the key sources of market power for this oligopolistic group.
“Traders monetize exclusive information about the operation of global grain supply chains,” the expert noted. “This creates a vicious cycle: obtaining exclusive data, financial speculation, strengthening market dominance, and collecting exclusive data. In many respects, this resembles insider trading in financial markets, where the use of exclusive information for speculative transactions is prohibited, while for some reason it is permitted in global grain and other commodity markets.”
Ivanov also addressed the role of the state-owned agricultural conglomerate COFCO. The company’s history is linked to the so-called 2004 soybean battle, when Chinese soybean importers were hit by global price volatility that benefited the ABCD traders, who at the time accounted for a major share of Brazilian soybean supplies to China.
According to Ivanov, China recognized at that point that ensuring its food security required full integration into the global trading system through the creation of a world-class trading company capable of competing with the ABCD traders. It was in this context that COFCO became an important instrument for implementing this strategy and establishing China’s own coordinating power in global food markets.
Anastasia Nesvetailova, Director, Macroeconomic and Development Policies Branch, GDS, UNCTAD, elaborating on Alexey Ivanov’s point about the financialization of the grain trade, said that the main problem is that the financial activities of major traders create systemic risks that are largely outside the scope of existing regulation.
“Another problem is that we cannot directly accuse global agribusiness traders of speculation. One of the reasons is their extraordinarily complex structure. These companies resemble dragons with many heads,”
Nesvetailova said. In her view, existing antitrust and financial regulation is insufficient.
“We need to examine the financial architecture of food markets more closely, including through sectoral studies and by paying greater attention to derivatives, intra-group transactions, and systemic risks,”
she emphasized.
Mohammed El-Beltagy, CEO, Optomatica (Egypt), outlined in detail the potential organizational and technological features of a new inclusive platform for global grain trade that could serve as the foundation for a pro-competitive architecture for such trade, including within the framework of the BRICS Grain Exchange currently under development.
Gao Yuning, Tenured Associate Professor, Director of the Institute of International development and Global Governance, Deputy Dean, School of Public Policy and Management, Tsinghua University, proposed a new approach to analyzing global food trade: tracking not only physical flows of goods, but also the flows of income and value added throughout the entire supply chain. In particular, one potential source of traders’ revenue may be the transfer of carbon emissions along the supply chain, which is not captured by standard economic models.
Wang Dongbin, Research Program Director, China Institute, Fudan University, emphasized that the key challenges facing the agri-food system today are reflected in the unequal opportunities available to smallholder farms when interacting with concentrated segments of the global food system.
China’s experience demonstrates how a highly mechanized and commercialized agricultural sector can coexist with a large number of small family farms, in particular through the development of specialized services and cooperatives. The challenges faced by small-scale producers are relevant to most BRICS and Global South countries.
Sarah Hassan Abdelhamid, Economic Consultant, Egyptian Competition Authority (ECA), Director of the UNCTAD Competition Training Centre for North Africa, argued that the global grain market, on which Egypt is heavily dependent, can no longer be viewed simply as a linear chain from producer to consumer. It is increasingly an interconnected ecosystem in which trade, storage, infrastructure, financing, data, and other factors influence one another.
A single company may operate across several segments at once: for example, a trader may have its own storage and processing facilities, access to port infrastructure, or more favorable financing terms. This can allow it to acquire market power in one segment and leverage it into adjacent markets. Therefore, moving from an analysis of competition in individual product markets to an analysis of the ecosystem of trading relationships is not merely another way of describing the market, but a fundamental shift in the approach to assessing competition — one that the Egyptian Competition Authority has already adopted.
Khalirendwe Ranenyeni, Principal Economist, Competition Commission of South Africa, agreed with this assessment. She presented the Commission’s experience in regulating the grain market and emphasized that its structure poses significant challenges for antitrust enforcement. Joint studies of supply chains by several competition authorities, for example within the BRICS framework, could significantly improve the effectiveness of antitrust enforcement in this area.
“The main problem is the lack of transparency in the market. Today, most commodity transactions in South Africa are conducted over the counter. This in itself is a problem: we do not know what market participants are agreeing on or exactly how traders interact with farmers.”
Anastasia Dokukina, Deputy Head, Division for International Organizations, Department for International Economic Cooperation, FAS Russia, believes that when assessing global mergers and acquisitions, competition authorities should consider not only an individual national market but the entire global supply chain. International cooperation should be a key tool in this process. BRICS competition authorities are already cooperating through the Working Group for the Research of Competition Issues in Food Markets, as well as through a joint study of global grain trade supported by the BRICS Competition Centre.
In concluding the joint academic seminar, Cui Zhiyuan, Professor, Institute for Advanced Study in Humanities and Social Sciences, Tsinghua University and a long-standing friend and partner of the BRICS Competition Centre, highlighted several ideas that he found particularly important.
First, he proposed studying the regulation of derivatives transactions by Chinese state-owned enterprises and comparing it with practices in other countries. Second, he drew attention to China’s agricultural model, in which small family farms coexist with large-scale systems of cooperatives, supply chains, and shared use of agricultural machinery. Finally, he proposed a comparative study of the operations of China’s COFCO and global company Cargill in South Africa. Both companies work extensively with smallholder farmers, but differences between them—notably their state-owned and private ownership structures—may influence the models of such engagement.
