ANDREY TSYGANOV: EXCHANGE TRADING WILL GENERATE TRANSPARENT PRICING FOR MINERAL FERTILIZERS
Deputy Head of FAS took part in launching trading with mineral fertilizers.
On 19 December there was an official ceremony of launching a pilot project for competitive bidding with carbamide (B grade), organized by a specialized Sub-Committee of FAS Exchange Committee, the Working Group of Russian Association of Fertilizer Manufacturers and St Petersburg International Mercantile Exchange. The first transaction was performed through protected trading.
“The pilot trading project is very important for all market participants since it has a certain incentive system”, Deputy Head of FASAndrey Tsyganov. ”For producers of mineral fertilizers this is a possibility to get the price close to the market one. Under the Law “On Protection of Competition”, the price set at the Exchange cannot be monopolistically high, provided a particular list of conditions is observed. Therefore, market participants get some kind of pardon from possible actions of the competition authority aimed at exposing violations of the antimonopoly law in the form of fixing monopolistically high price, and market consumers receive guaranteed delivery and obtain possibility to conclude transactions at the prices maximum close to the market prices”.
At the event, Deputy Head of FAS answered questions and emphasized that “Russian agrarian sector is sufficiently developed and mature to work under the normal market conditions. Exchange trading is one of such conditions”.
Under the Road Map for developing exchange trading, it is expected that the results of the pilot project will be summed up in Q1 2018 and measures will be designed for further scaling trading for a broader range of mineral fertilizers in Russia. In particular, the number of bidders will be expanded, exchange documentation should be adjusted and the legislative framework shall be improved.
Head of FAS Department for Regulating the Fuel-and-Energy Complex, Dmitry Makhonin, and Deputy Head of FAS Department for Control over Chemical Industry ad Agro-Industrial Complex, Sergey Vershinin, also took part in the event.