Russia is proposing that the BRICS countries create a grain exchange, thus aiming to gain greater control over the international prices of their agricultural exports. Moreover, the proposal will be presented during the BRICS summit, which will be attended by heads of state of the largest global grain producers and buyers.
The move comes at a time of frustration in Russia over low global oil prices. wheat. As the world’s largest wheat exporter, the country has sought to limit its exports through international intermediaries to avoid selling at discounted prices. For example, on October 11, Moscow recommended that its major wheat exporters not sell wheat for less than $250 in international tenders.
BRICS Grain Trading Platform
According to a document prepared by the Central Bank of Russia and the Ministry of Finance, the proposal includes the creation of a grain trading platform within the BRICS Grain Exchange. This measure aims to ensure efficient, transparent and uninterrupted trade of commodities between the countries of the group.
Russian President Vladimir Putin has sought to position BRICS as a countervailing force to Western dominance in global politics and trade. The group now includes Egypt, Ethiopia, Iran and the United Arab Emirates. It also has Brazil, Russia, India, China and South Africa as members.
BRICS Pricing Agency
Another point of the Russian proposal is the creation of a BRICS pricing agency. This agency would be responsible for developing pricing methodologies. In addition, it would conduct market analyses to create alternatives to current international prices, which are set by established Western exchanges.
The document also suggests that, in the future, BRICS extend grain trading mechanisms to other commodities, such as oil, natural gas and gold.
“This measure will ensure independent prices and strengthen the sovereignty of the BRICS economies,” the document states.
Skepticism about price controls
Experts, however, are skeptical about the BRICS' ability to influence global commodity prices beyond oil, which is largely controlled by OPEC+. While China and India, the founding members of BRICS, are the largest wheat producers, countries such as Egypt, Brazil and Iran are among the largest importers.
The BRICS summit will take place from October 22 to 24 in the city of Kazan, Russia.
Source: Gleb Bryanski | Agricultural News
