Global grain market under control of largest traders, making creation of BRICS Grain Exchange increasingly relevant - study
MOSCOW. Sept 15 (Interfax) - The global grain market is dominated by the largest agrobusiness traders, which makes it vulnerable, and BRICS countries may establish a grain exchange in response, with antitrust regulators invited to participate in its creation.
According to a press release from the International BRICS Competition Law and Policy Centre at HSE University, this is discussed in the report "From farm to futures: competition, financialization and digitalization in global grain value chains", presented on Friday at the 9th International BRICS Competition Conference in Cape Town.
The report pays particular attention to the activities of global grain traders amid economic and technological transformations in BRICS markets.
"For a long time, the global grain market has been controlled by the oligopoly of the largest agrobusiness traders in the ABCD+ group (ADM, Bunge, Cargill, Louis Dreyfus Company + COFCO, Olam and so on). Such concentration of market power, along with certain structural features of this market, makes it vulnerable to price fluctuations and various speculative practices, which negatively affect both grain producers and consumers in BRICS countries. It also creates risks for global food security as well as for the sustainable development of the agricultural sector in the BRICS economies," the press release said.
The report describes several key trends that today directly affect farmers, consumers and global grain trade. "First and foremost is financialization, i.e. the close link between financial and trading infrastructure. Grain trading is increasingly accompanied by financial speculation that influences global price formation. Grain traders are engaged in large-scale yet largely unregulated banking operations, which are becoming more profitable for them than the grain trade itself. This phenomenon remains outside the scope of traditional antitrust analysis," the report said. "The financial activity of traders is made possible thanks to information asymmetry - access to exclusive data unavailable to other market participants. As the ABCD+ group strengthens control over logistics and infrastructure, their informational advantage only grows. Digital platforms reinforce this trend."
The authors of the study also note several other trends, including the growth of corporate interconnectedness and cooperation between global traders, in part through the simultaneous participation of institutional investors.
Against this backdrop, researchers suggest that BRICS countries develop a coordinated antitrust response and involve competition authorities in the design of the BRICS Grain Exchange as a unified platform with transparent pricing and clear, accessible hedging mechanisms necessary for the effective organization of grain trade.
If implemented properly, the creation of such an exchange could be a step towards reducing price volatility, increasing pricing transparency and improving market competition in the global grain trade, the authors said. This would require the active involvement of antitrust authorities from BRICS countries.
For the exchange to function successfully, it is critical to eliminate information asymmetry, especially regarding data on grain reserves in key logistics hubs, which at present are available only to global traders, the authors of the report said. Antitrust measures could require them to disclose such information, thereby reducing opportunities for speculation and ensuring more inclusive and sustainable operation of the future exchange, they said.
"We call on the antitrust agencies of BRICS countries to pay closer attention to grain markets and to the activities of global grain traders. One of the conclusions of our report is that the proactive stance currently taken by antitrust authorities in the digital sphere should also be applied to agricultural markets," Alexei Ivanov, the director of the International BRICS Competition Law and Policy Centre and professor at HSE University, was quoted as saying in the press release.
As reported, the Russian Union of Grain Exporters first proposed creating a BRICS Grain Exchange at the end of 2023. The initiative was approved by President Vladimir Putin during a meeting with agricultural producers in Stavropol Territory in March 2024. The proposal to establish the exchange was supported by the members of the association in October 2024 at the BRICS summit in Kazan.
Concept development and other issues related to the creation of this trading platform are being handled in Russia by an interdepartmental group under the Economic Development Ministry. In mid-June 2025, it was reported that the draft concept was currently undergoing interdepartmental review and was being prepared for submission to BRICS partners.
