According to the World Grain Report, Russia has urged the BRICS, a trade alliance between nine emerging countries, to establish an inter-bloc grain exchange.
Despite the BRICS’s aim to facilitate trade activity between its members, experts said that the new exchange would have a structure similar to the Organization of the Petroleum Exporting Countries (OPEC), but for the global grain market, with the goal of influencing free pricing.
This idea of establishing an inter-BRICS grain exchange was announced by the Russian Union of Grain Exporters (RUGE).
The BRICS allies consist of Egypt, Ethiopia, Iran, and the United Arab Emirates. Several countries, such as Brazil, China, India, Russia, and South Africa, later joined the alliance in January 2024. Saudi Arabia has also been invited to the alliances and is considering joining them.
Putin said during a meeting with Russian farmers that “All benchmark (grain) prices are set in the USA and Europe, for example, in Paris. How much grain do the French produce? I think less than we do. And still, according to tradition, benchmark prices are formed out there.”.
Putin said that the existing pricing structure on the global grain market was unfair.
According to Eduard Zernin, head of the Russian Union of Grain Exporters (RUGE), the BRICS grain exchange was expected to be technically ready by October. Zernin also said that the word “exchange” is only for reference, and Russia is planning to create a digital marketplace.
According to the World Grain Report, all of the BRICS members are showing great support for the initiatives. In Russia, the creation of the exchange is seen as a way to challenge the western world order, similar to OPEC, which was established in the 1960s to challenge the oligopoly of Anglo-American oil firms.
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An independent Russian analyst, Leonid Khazanov, is saying that “the creation of a BRICS grain exchange will make it possible to rejiggle the global market in favor of the members of this organization and change the directions of logistics flows and their participants.”
Globally, Russia accounts for as much as 1/4 of all global grain exports. Currently, global prices are set by western exchanges such as the American CME Group and MATIF in France. And the supplies were controlled by giant western traders like Viterra and Cargill.
In December 2023, the Russian Agricultural Ministry estimated that all the BRICS members combined as much as 1.17 million metric tons of grain. Account for as much as 43% of global grain volume.
Source : https://www.world-grain.com/articles/19823-russia-pushing-for-brics-grain-exchange