Grain Exporters Union works out auction mechanism for Russian grain importers from 'friendly' countries

MOSCOW. March 2 (Interfax) - The Grain Exporters Union, together with the Moscow Exchange , has worked out a mechanism for export grain auctions with settlements in rubles that will be open to importers of Russian grain from "friendly" countries, United Grain Company (UGC) deputy CEO Ksenia Bolomatova said at the Agro Day agribusiness conference in Moscow on Wednesday.

"The mechanism calls for organizing settlements through the National Clearing Center and we plan to hold the actual purchase auctions at the National Mercantile Exchange, a division of the Moscow Exchange Group," Bolomatova said.

The launch of exchange export trading of grain will give Russia a line of its own price indicators, benchmarks on FOB basis, she said. "Trading can be launched as soon as this mechanism is approved, Bolomatova said.

Grain Exporters Union CEO Eduard Zernin told Interfax that, despite record grain exports, a "systemic tightening of the sanctions ring [is taking place] through banks, financial and shipping companies."

"We need to work out a mechanism of trading for rubles ahead of time. The market is waiting for a solution for ruble funding. Without a mechanism for financing in rubles, it will be impossible to launch export exchange trading in Russia," he said.

"The first buyers who risked entering ruble contracts with our exporters faced problems acquiring our currency for settlements and losses on exchange rate differences, which had a negative impact on the further development of business. Furthermore, in the absence of our activity, there is a good chance of a grain exchange emerging in the Middle East, where a similar project is being explored right now," Zernin said.

The price situation on this key market for Russian agricultural exports could change dramatically if the initiative passes from the leading grain exporter to importing countries, he said.

Russia harvested a record 153.8 million tonnes of grain in 2022, including 104.4 million tonnes of wheat, according to tentative data from the Federal Statistics Service. The Agriculture Ministry expects grain exports to total 55 million-60 million tonnes in the current agricultural year.