How does exchange trade stimulate exports?

1 october 2018

“The Analytical Center with assistance of the Federal Antimonopoly Service of Russia studied the exchange trade in non-energy and non-commodity sector,” said Ksenia Bannikova, Head of the Foreign Economic Activity Department of the Analytical Center, opening the round table “Exchange Trading Opportunities as Export Promotion Tool.”

According to Ms. Bannikova, the study objective is to understand whether exchange trade can contribute to increase in the Russian exports. So far, the main share of goods sold on the exchange market in our country accounts for mineral fuel. According to the findings of the study on the activities of the exchange markets of agricultural products in different countries, they increase the volume of foreign economic operations.

The experience of organizing trades at the Moscow Exchange, which is leading in Russia, was shared by Sergey Kiselev, Deputy Director of the Department of the Moscow Commodity Exchange Market PJSC. He states that the exchange market today is a complex financial mechanism that involves trading, financial and warehousing services, including SWAP, an attractive tool that is actively used by bidders.  

"Our immediate plans embrace a liquid market and new products," said Mr. Kiselev. According to him, the advantage of exchange trade lies in the absence of tax risks for buyers and in less administrative burden for sellers. The speaker also noted the positive actions of the state in the formation of the exchange market.

“We are working on financial literacy of agricultural producers, which is fundamentally important for the development of exchange trade and exports,” said Sergey Kryzhanovsky, Director of the Commodity Markets Department at RosEvroBank. "We have the most up-to-date database of manufacturers, and even a small business owner can connect through us to trade on the Moscow Exchange."

Yuri Pankov, the founder of Crimean Exchange JSC shared his experience of creating this youngest Russian exchange market. He believes that dealers are still required because farmers do not want to sell themselves, which confirms the importance of teaching them financial literacy. “The exchange market in Russia is a big hypermarket with empty shelves,” Mr. Pankov compared. “Trades require a much larger product range, and state assistance in attracting producers to exchange trade would be useful.”

Viktor Osipov, President of the National Partnership of Construction Materials Manufacturers, supported him. “Even if we fill the shelves only with glass, there would be twenty product names,” he noted. According to Mr. Osipov, the main barriers to the development of exports are the timing of financial transactions, such as the return of VAT (up to 45 days) and the bank guarantee under the contract (up to 40 days).

Oleg Yakubovich, Adviser of the Representative Office of the Belorussian Universal Commodity Exchange in the Russian Federation, introduced the Belorussian experience of exchange trade to the participants in the meeting, after which an open discussion took place.