Russian President Vladimir Putin has proposed setting up a BRICS-based grain exchange, during a speech at the annual BRICS summit on Wednesday. Addressing the BRICS country leaders in Kazan, Putin said that such an exchange would help protect trade between members of the group from excessive price volatility.
”A number of BRICS countries are among the world’s largest producers of grain, vegetables, and oilseeds. We propose opening a BRICS grain exchange, which would facilitate the formation of fair and predictable price indicators for products and raw materials, taking into account their special role in ensuring food security,” the Russian leader stated.
Putin said that the project would help protect national markets from “negative outside interference, speculation, and attempts to сause an artificial deficit” of goods.
A grain exchange would boost economic relations between BRICS nations and in time, the platform could be transformed into a full-fledged commodity market, the president said.
The idea was first floated by the head of Russia’s Union of Grain Exporters, Eduard Zernin, at a meeting with the Russian president earlier this year. Putin supported the initiative and expressed confidence that many countries in the group would be interested in a BRICS-based grain exchange.
The platform would also allow member countries to trade grain directly and reduce reliance on Western-dominated pricing systems that currently set benchmark prices at bourses such as Chicago and Paris.
Russia is the world’s top wheat exporter and has substantially boosted exports in recent years with bumper harvests and attractive pricing, despite Western sanctions that have attempted to thwart the country’s cross-border trade. Moscow has also been supplying free grain to a number of African countries facing food insecurity.
Current BRICS members include Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. More than 30 countries have applied for membership in the group, which represents approximately 46% of the world’s population and over 36% of global GDP.