National Mercantile Exchange, part of Moscow Exchange Group, launched on-exchange trading in grain today December 23rd, 2015. NCC Clearing Bank will act as the central counter-party. National Logistic Company will act as logistics provider, alongside surveyor companies. Accredited elevators will provide grain storage solutions.
The Exchange currently offers deliverable wheat forwards with minimum lot size of one ton and delivery lot of 68 tons. Wheat from classes 3 to 5 is used as an underlying asset. Contract settlement periods range from three days to six months.
“Russia has ramped up grain production over the past few decades and become one of the world’s largest exporters of this key commodity. Creating a grain marketplace marks a milestone in the modern history of the Russia’s grain market, and will provide transparent and fair pricing, mitigate the risks involved in lending to grain producers and improve the efficiency of grain business. On-exchange trading will also allow small players that often have advanced grain processing technologies to be involved in the national grain market. Other agricultural commodities typically traded on exchanges are planned to be offered in 2016 and following years”, said Deputy Agriculture Minister Sergey Levin.
“The on-exchange grain market will boost the liquidity and transparency of the commodities market and thus put Russia among the global leaders in terms of the development of its agricultural sector. We have created a unique technology for grain trading and established a new trading and clearing system. Four accredited grain silos are now available for the market and we expect the number will grow many times over in future. All major grain dealers as well as brokers already authorized by Moscow Exchange will be able to trade. Producers, commercial users, exporters, traders and investors will have access to the market via dealers and brokers. We plan to extend the underlying asset offering, firstly for agricultural products and then for other commodity groups,” said Moscow Exchange CEO Alexander Afanasiev.
To view the official announcement click here.