Russia wants to create BRICS ‘grain exchange’ and undermine global cereal market

The South China Morning Post reports that Russia is planning to create a BRICS grain exchange, a move that promises to significantly impact the global agricultural scene.

The new cereal exchange will unite the world’s main cereal buyers and exporters, representing around 42% of global production and 40% of cereal consumption in 2023, according to the Russian Ministry of Agriculture.

The initiative aims to strengthen Moscow’s position as the main cereal supplier, improve the bloc’s food security and challenge Western exporters, from the United States to Australia.

Russian President Vladimir Putin has expressed support for the move as a way to compete with the Western-dominated cereal pricing system and challenge the US dollar as the predominant global currency.

The inclusion of countries such as Saudi Arabia, Egypt, United Arab Emirates, Ethiopia and Iran in 2024 would increase cereal production to 1.24 billion tons and consumption to 1.23 billion.

The exchange of cereals between BRICS countries could further strengthen Moscow’s geopolitical and diplomatic influence over its allies, in addition to increasing economic confidence.

This initiative can also reduce uncertainty and ensure a steady flow of goods, especially in the face of disruptions to global supply chains and growing food shortage issues.

Furthermore, cereal exchanges between BRICS countries could pave the way for greater interregional trade and even the establishment of a more comprehensive BRICS commodity exchange.

On the other hand, Western cereal and fertilizer exporters may face greater competition in agricultural diplomacy and the need to seek alternative markets for their products.

Despite Western restrictions on the Russian agricultural sector, Russia remains an important figure in global agriculture, accounting for almost a quarter of the world cereal market. In 2023, the country exported agricultural products worth at least US$43.5 billion (R$218 billion), and plans to sell up to 65 million tons of cereals in 2024.

With information from Sputnik