Russian Union of Grain Exporters proposes to create a BRICS grain exchange as part of Russia's BRICS presidency in 2024.
In the letter sent to Russia's Agriculture Minister, Dmitry Patrushev, the organization offered to present the initiative at the next BRICS meeting and, then, to form a working group of representatives from interested countries.
According to the calculations of the union, 40% of world grain production and consumption falls on the countries of the union. BRICS members produce more than 1 billion tonnes of grain annually.
"China, India, Russia and Brazil are among the top 5 grain producers in the world. In addition, Russia provides 20-25% of world wheat trade, the same is true for corn supplies from Brazil. China is not only a major producer of grain crops, but also the largest importer of wheat. Taking into account the expected entry into the BRICS of new member countries [...] the BRICS influence on the global grain market will grow even stronger," the letter said.
The Union underlined that the modern infrastructure of the global grain market developed after World War II with the dominance of wheat and corn supplies from the United States. Market benchmarks currently used by the BRICS countries, among others, are formed on the basis of quotations of grain crops on the Chicago Stock Exchange (CME), the organization added, noting that the clearing currency is mainly the US dollar.
"The BRICS countries, being key participants in the global grain market, cannot fully participate in the formation of prices for such basic agricultural products important for their food security and economy as wheat, barley and corn, world prices for which are formed, and often manipulated, in third countries," the authors of the letter highlighted.
The answer to the situation may be the creation of a unified BRICS trade and clearing infrastructure, within which grain exchange trading between companies of the member countries of the association will be carried out, according to the union.
Russian grain exports this year increased 1.5 times compared to 2022, according to the country's ministry of agriculture. In accordance with Russian leader Vladimir Putin's promise to deliver free grain to six African countries, namely Burkina Faso, Zimbabwe, Mali, Somalia, the Central African Republic and Eritrea, Russia organized the gratuitous wheat supplies to the continent. Some of the shipments have already arrived, while others are on the way.