EXCHANGE – AN ALTERNATIVE AND FUNCTIONAL CHANNEL TO SELL GOODS

Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industry, Dmitry Makhonin, discussed this prospective trading tool

On 10 October 2019, Dmitry Makhonin was a speaker at the “Strategy for developing crop production till 2025, the interim results of 2019” session, which was part of the business programme at the XXI Russian Agro-Industrial Exhibition – “Golden Autumn – 2019”.

He informed about exchange trade development:

“Exchange trade is a FAS priority. We believe that this tool forms fair prices based on the demand-supply balance and is very prospective”.

In the context of fertilizers trade, Dmitry Makhonin emphasized that this alternative trade channel is much sought-after and reminded about a successful pilot project on exchange trade with carbamide B. The range of traded fertilizers has been expanded considerably.

The speaker also described the work of the Exchange Committee, where producers, consumers and industry associations discuss the market trends and legislative changes.

Dmitry Makhonin emphasized that exchange indicators are already used in tariff regulation, financial control and budgeting.

Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industryadded that a joint order of FAS and the Ministry of Industry and Trade of the Russian Federation is currently under approval – it formalizes liquidity of exchange trade at no less than 10% supplies to the domestic market.

He pointed out: “It is necessary to ensure the balance of interests. The domestic market should be a bigger priority for supplying fertilizers by producers”.

“The Exchange is not a one-time tool. Instead it is a standing mechanism that forms fair and transparent prices, particularly, based on anonymous declaration of will by buyers through double, two-way auctions”, concluded Dmitry Makhonin.