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BRICS Proposes Grain Exchange to Depoliticize Global Market, Experts Tell Sputnik

16:39, 25 October 2024

Christina Glazkova

Writer / Editor

Moscow proposed creating a BRICS grain exchange, which would serve as a new trading platform for the world's largest producers and consumers. According to experts interviewed by Sputnik, this initiative could help depoliticize global markets and eliminate intermediaries in the form of Western exchanges.

Sputnik

The dominance of the US in the global economy didn't truly begin with the dollar; it's important to remember that after World War II, Americans became the main suppliers of wheat and corn. As a result, the modern infrastructure of the global grain market has been shaped by Washington. Thus, reference points are guided by quotations from the Chicago Mercantile Exchange, and the US dollar is primarily used as the settlement currency.

Meanwhile, the US is not the leader in global grain exports. Russia is the leader, and its BRICS partners are also among the top exporters. However, despite this, "they cannot fully participate in setting prices for basic agricultural products" and face manipulation by third countries, Russian President Vladimir Putin commented at the XVI Summit of the bloc in Kazan.

Consequently, in the words of the Russian leader, the task arises to protect national markets "from negative external interference, speculation, and attempts to provoke an artificial shortage of food products," a task assigned to the BRICS grain exchange.

"The new trading platform depoliticizes the grain market," remarked Jadzhimurad Beljoróyev, an economist at the Russian Peoples’ Friendship University Patrice Lumumba, to Sputnik.

According to the expert, the Chicago and Paris exchanges practically lack the price-setting mechanisms declared in economic theory, and "collusion by sellers, disseminating unreliable information through affiliated and/or controlled media, is common practice for speculators."

Thus, it concerns both the main suppliers and the largest buyers, and the proposed mechanism eliminates intermediaries, at least in the form of the Chicago Exchange.

"The world is divided into two parts: the US with its satellites and Russia and China with their partners. It's logical to establish transparent relationships with partners, including logistics, settlements, and liquidity," noted Anatoli Tikhonov, Director of the Center for Agribusiness and Food Security at the Russian Presidential Academy.

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In this context, the exchange will alleviate uncertainty and ensure supply stability "amid global logistical disruptions and growing food shortages," highlighted the South China Morning Post.

As a result, as noted by the participants at the BRICS Summit, a common commodities exchange could be the next step.

"In case of success with grains, conditions will be created to accelerate the formation of a complete infrastructure for broader and deeper trade interaction in different sectors," specified Aleksandr Prisiazniuk, Director of the Investment Department at the Russian Agricultural Bank.

For example, Russia proposes creating a separate platform for diamonds and precious metals. Experts stress that this will help combat trade barriers in the market and not only strengthen the geoeconomic influence of BRICS but also pose a serious challenge to the West.