Timber – to exchange

Alexander Razin: “The exchange price formed in the course of liquid tenders, is the most transparent and fair price for the goods”.

On 21 April 2017, Deputy Head of FAS Department for Financial Markets Control Alexander Razin took part in a Conference on “Timber and wood products market”.

His session focused on pricing on the world and Russian timber market and the trading tools. Attention was paid to developing exchange trading with timber products on both domestic market and for export.

Alexander Razin reported on the efforts of the Exchange Committee in this field, establishing a specialized Sub-Committee and its plans.

Today timber exchange trading in Russia takes place at St Petersburg International Mercantile Exchange, pilot projects have been tested in the Irkutsk and Perm regions, next in line are the Kirov region and other provinces. FAS representatives clarified that there is a process of interdepartmental coordination of the Road Map (the Action Plan) on developing organized exchange trading with wood materials by the end of 2017.

The speaker discussed the prospects of amending regulatory acts, in particular, elaborating on the issue of including wood products in the list of goods for registering off-exchange contracts under the relevant Decree of the Government of the Russian Federation. He pointed out that using data obtained through registering off-exchange transactions “enable creating a price indicator, with which product of any price agency, either domestic or foreign, cannot compete in terms of their representativeness and accuracy”. In this context, Alexander Razin gave an example of successful launching and developing exchange trading on other markets, including, oil products, and covered the issue of standardizing timber products, and verifying their quality, particularly, through possible employment of accredited exchange warehouses and the institution of surveyors.

Finally, he reminded on the position of the Exchange Committee and FAS that is it necessary to form a liquid exchange timber market and representative price indicators.

Alexander Razin pointed out: “For us it is an undisputable truth that today the exchange price formed in the course of liquid trading is the most transparent and fair price for the goods. It is absolutely evident that in view of this position development of organized trading, particularly, with timber, is an important objective for us”.