On February 10-11, a meeting of the BRICS Working Group for the Research of Competition Issues in Food Markets was held in Cairo, Egypt. The event was organized by Egypt's Competition Authority jointly with Russia's Federal Antimonopoly Service (FAS) and the International BRICS Competition Law and Policy Centre (BRICS Centre). Participants included representatives from South Africa's antitrust authorities, UNCTAD, and the academic community. Analytical reviews were presented, covering grain market dynamics, price volatility, geopolitical risks, and the impact of climate change on food security. The program also addressed global supply chains, technological innovations, and the consequences of climate change.
In his opening speech, Mahmoud Momtaz, Chairman of Egypt's Competition Authority (ECA), emphasized the importance of studying the grain trade market within BRICS, taking into account competition mechanisms and market structural features. He advocated for the creation of a joint procurement mechanism, integrating warehouse capabilities and involving the New Development Bank. Hardin Ratshisusu, Deputy Commissioner of the Competition Commission of South Africa, highlighted that market research helps in providing a comprehensive analysis of the entire value chain and identifying its "bottlenecks." He added that this format allows for a holistic view with fewer time and resource expenditures compared to traditional antitrust investigations, emphasizing the importance of a collective approach by BRICS countries to identify anti-competitive practices and create joint data-sharing platforms. Teresa Moreira, Head of the Competition and Consumer Policy Division at the UN Conference on Trade and Development (UNCTAD), stressed the significance of cooperation among regulators in developing countries and highly valued the expert role of the BRICS Centre in collaborative competition development efforts.
In his report entitled "The Global Grain Value Chains," Alexey Ivanov, Director of the BRICS Competition Centre, highlighted a paradox in food markets: despite apparent abundance, two-thirds of the diet of over 4 billion people consists of just a few crops — wheat, rice, and corn. He focused on systemic threats to food security, including biodiversity loss, climate shocks, and geopolitical instability. Special attention was given to financial speculation as a factor exacerbating grain price volatility and destabilizing markets, detaching them from fundamental supply and demand indicators.
In the photo, from left to right: Alexey Ivanov, Tatyana Gonyukova, Mahmoud Momtaz. © HSE University
Ivanov also presented an analysis of export supply concentration and commodity dependency, noting the vulnerability of BRICS countries, which play a crucial role in grain production and consumption, due to existing pricing mechanisms. He emphasized that while digitalization in the agricultural sector opens up new opportunities, it is happening in a fragmented manner and may increase power concentration in the hands of major tech platforms and agro-holdings. An example of such concentration is the Covantis platform, created by the largest agricultural traders of the ABCD group (Archer Daniels Midland, Bunge, Cargill, Louis Dreyfus Company). In 2023, Covantis handled 76% of grain exports from Brazil, 53% from the U.S., 34% from Canada, and 51% from Argentina.
"BRICS countries and their partners, who produce more than 50% of the world’s wheat, corn, and rice, face the task of countering the monopolization of food markets and ensuring fair and sustainable development of global grain supply chains,"
Ivanov concluded.
The session continued with a presentation “ABCD: Challenges of Financialization” by Anastasia Nesvetailova, Head, Macroeconomic and Development Policies Branch, UNCTAD/GDS. She took a detailed look at the financial dynamics of the world's largest agribusiness companies in the ABCD group, as well as a number of other key industry players. Despite stable global market shares, the profits of these companies had increased significantly between 2020 and 2023, especially during periods of high price volatility. The speaker noted that the concept of “super-profits” conceals the diversity of companies' activities, including the growing role of financial transactions in profit generation. The analysis of OTC commodity derivatives markets showed the danger of blurring the boundaries between hedging and speculation, which creates risks of financial instability and price inflation.
Ms. Nesvetailova revealed the complex structure of intercompany financial transactions, which allows food monopolies to combine market knowledge, custody and confidentiality. The growth of the “shadow banking system” in the food trade sector with up to $120 billion in accumulated funds and the need to revise regulatory policy to take into account corporate arbitrage and the financial power of large players was noted. The speaker emphasized the inadmissibility of corporate sovereignty over food systems, the need for proactive regulation and the importance of using financial reports for concentration research.
Michael Obersteiner, Director, Environmental Change Institute, University of Oxford, noted that volatility in the food system makes it insufficiently resilient to external shocks. He discussed the interconnections between price volatility, inflation, exchange rates, interest rates, and debt burdens, which can create a potential spiral of chronic hunger and debt dependency for vulnerable countries. He questioned the effectiveness of highly concentrated grain markets and pointed to the dominance of ABCD group companies, which control a significant share of global grain trade, their vertical integration, information asymmetry, the use of storage capacity as a financial tool, and the prevalence of OTC trading. In conclusion, the speaker emphasized the importance of further research to improve the resilience and fairness of the global food system
Tatyana Gonyukova, Deputy Head of Division, Department for International Economic Cooperation of the FAS of Russia, highlighted the growing relevance of the group’s work amid the instability of global food markets, geopolitical challenges, and the expansion of BRICS. Food security is a priority for BRICS countries, as reflected in summit declarations and the UN Sustainable Development Goals. The FAS representative emphasized the multifaceted role of competition policy in ensuring food security and the importance of commodity exchange trading as a tool for fair pricing, mentioning Russia's initiative to establish a BRICS grain exchange.
In the photo, from left to right: Teresa Moreira, ECA representative, Anastasia Nesvatailova, Irina Atrokhova, Yulia Kokunova. © HSE University
Yulia Kokunova, Head, Department for Agro‑industrial Complex, FAS of Russia, discussed antitrust measures at all stages of the agricultural supply chain in Russia. In response to rising prices for socially important food products, FAS, alongside government support measures for agricultural producers, actively employs "soft law" tools such as voluntary market commitments to limit prices or trade markups, and also monitors compliance with antitrust legislation in the provision of government support. Special attention is given to controlling economic concentration in foreign transactions to enhance the competitiveness of domestic producers and facilitate the transfer of R&D to Russia. In conclusion, Ms. Kokunova emphasized that the development of commodity exchange trading plays a key role in forming a transparent pricing system, reducing price volatility in food products, and creating mechanisms to hedge price risks for market participants, which in turn fosters investment in the agribusiness sector.
Following the theme of market volatility, Kagiso Zwane, Economic Research Buro of the Competition Commission of South Africa, presented a report analyzing the situation on the South African grain market after the onset of the geopolitical crisis in 2022. In particular, the most significant price fluctuations are observed on the markets of sunflower oil and maize meal. For sunflower oil, the rapporteur noted the sharp decline in procurement prices for producers following a period of falling sunflower seed prices, but noted that there has been no adequate reduction in retail prices for consumers, raising concerns about slow price transmission and the possibility of unjustified margins at intermediate stages of the chain. The speaker emphasized the importance of the international data collection system to improve market monitoring and the need for joint research on trade dynamics and behavior of key players.
A lively discussion arose around the use of sustainability references by large companies to protect themselves from antitrust investigations. By forming partnerships under the guise of developing environmental projects and innovations, these companies can avoid regulatory scrutiny while simultaneously strengthening their market power.
“Sustainability and public interest arguments should be used more actively by competition authorities to enhance enforcement, rather than simply being seen as an argument to defend against regulatory intervention by companies,”
emphasized the Director of the BRICS Centre.
The discussion resulted in a common understanding among the Working Group participants of the need to develop a set of measures aimed at improving the sustainability and balance of global grain trade. For in-depth study of systemic distortions in this sector, the BRICS Centre developed a detailed questionnaire, which was presented to the participants of the Working Group. The questionnaire aims to collect primary data on the state of competition in global grain value chains in the BRICS countries. In particular, it covers the main channels of grain exports and imports in each country, focusing on the share of public and private transnational traders, commodity exchanges and over-the-counter contracts. Considerable attention is paid to identifying signs of concentration at different segments of the chain, from input production and crop cultivation to procurement, transportation, storage, processing, marketing and exports, and wholesale trade. A separate set of issues is devoted to the impact of digitalization of grain trade and the spread of digital platforms promoted by international traders on competition in this segment.
At the conclusion of the meeting, Teresa Moreira noted that modern competition policy is undergoing a transformation, moving beyond its traditional focus on economic efficiency to include goals related to sustainability and food security. She emphasized the need for a whole-of-government approach, which consolidates the efforts of various government agencies and integrates competition policy into the broader context of national policy.
The BRICS Working Group was established in 2015, when Russia held the BRICS chairmanship. The group was engaged in researching competition issues in global food markets. It was then that the format of work was tested for the first time, in which the scientific circles of the BRICS countries united to assist antimonopoly agencies. The scientific and expert support to the BRICS Working Group on Food Markets is coordinated by the International BRICS Competition Law and Policy Centre and includes antitrust and agri-food market regulation scholars from all BRICS countries.
