Ukraine's organized commodity market grew 6% in 2023 - National Securities and Stock Market Commission member

MOSCOW. March 7 (Interfax) - Ukraine's organized commodity market turnover grew more than 6% to UAH 310 billion in 2023 compared with 2022 and was higher than in previous years also, Arsen Ilyin, a member of the National Securities and Stock Exchange Commission, said in an interview with Ukrainian media.

"The main commodity traded last year, as the year before, was electricity - 62.5%, followed by oil and distillates - 14%, unprocessed timber - 8.5% and liquefied petroleum gas - 7.6%. Everything else was traded to a lesser extent, but there was also coal, bitumen and others. There are eight main headings, excluding sub-headings," he said.

Ilyin said that although the electricity market consisted of various segments and prices on each of them were formed separately, and some segments traded by a different mechanism, quite a significant share of electricity was traded on the exchange: it can reach up to 60%, so the exchange price for it is already an important indicator and can be used for guidance.

The member of the commission, which has been the Ukrainian commodity exchange market regulator since the middle of 2021, said the highlights of last year included the return of Naftogaz to the market.

"Naftogaz is the main market maker, so if it is not on the market, then it is difficult to talk about any indicators. But it was definitely there in 2023 and gas returned to the exchange market," Ilyin said.

He said oil and distillate also appeared on the market last year, largely because the state took temporary control of Ukrnafta and commodities were traded transparently.

Commenting on the licenses issued to two more exchanges in 2023 - the Ukrainian Trading Platform and the Ukrainian Resource Exchange which increased the number of market organizers to four - Ilyin said this had not yet been reflected in volumes.

"If the market is the same and a new participant appears on it, then market shares are simply redistributed, but volumes do not increase. Volumes do increase if someone brings a new commodity. Moreover, the new exchanges were only licensed in August, and appeared on the market at the end of the year: Ukrainian Trading Platform's share was less than 1% of the total volume, and Ukrainian Resource Exchange only succeeded in carrying out one test operation," Ilyin said.

But the market does now have a choice of four exchanges, some of which use different software, he said.

"The market has not yet become any bigger, but the chance of someone bringing a new commodity to it has improved," he said.

According to the Commission's register, commodity exchange licenses are also held by the Ukrainian Energy Exchange, since the end of June 2021, and the Ukrainian Universal Exchange, since the end of September 2021.