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Committee on Grain at the ETS is designed to support the development of the exchange of grain trade in the Republic of Kazakhstan  

At the end of last year JSC "NC" Food Corporation "for the first time in the grain market of Kazakhstan began to hold open an anonymous exchange auctions to commercial implementation of food wheat of 3 class. The emergence of Food Corporation at commodity trading has become a "breakthrough" ensuring maximum transparency and completely suits the domestic business.

In order to further the development of the domestic grain market and support the development of exchange trade in Kazakhstan as the most open and transparent tool of doing business, the Food Corporation has initiated the establishment of the Committee for Grain at the  Commodity Exchange of JSC "Eurasian Trading System" (ETS). The chairman of the Committee on Grains at the UTS, Managing Director - Commercial Director of JSC "NC" Food Corporation" Nurbek Dairbekov told about  the goals and objectives of the new body, and his future plans to our newspaper.

 

How did the idea of establishing ​​the Committee on the grain market at the ETS occur?
 

Exchange committees are advisory bodies of  Commodity Exchange, and act in accordance with the provisions of the Exchange Committee, adopted in the manner prescribed by the articles of association of a commodity exchange. Committees may be established commodity exchange in sections for analysis and synthesis of the results of stock trading, making proposals for the improvement of methods and forms of trading.

The structure of exchange committees may include employees, members of a commodity exchange, and their representatives, manufacturers, sellers and buyers of commodities, representatives of government agencies and other organizations in accordance with the provisions of the Exchange Committee.

In developed organized markets at the commodity exchanges there traditionally present such bodies  as committees. Committees are an important element of corporate governance of marketplaces. In addition, by analogy with the standards of corporate governance committees, the sectoral  committees are being established.

So, for example, on the Commodity Exchange "Eurasian Trading System" (ETS), with which JSC "NC" Food Corporation "has been cooperating for years, there already exists

Committee on Agricultural Markets. The next stage of our cooperation with the commodity exchange was the creation at the ETS on our initiative, a separate committee on grain, which is the objective necessity of the situation. The committee will accumulate and discuss organizational issues concerning the further improvement of stock trading by grain. In the medium term, the conditions for the maximum satisfaction of potential buyers will be created, as well as increasing the number of participants in the anonymous trading by improving information support for stock trading, attracting small and medium-sized agricultural producers.

Certainly, the development of organized grain markets in Kazakhstan is not only promising in commercial terms, but also an important social aspect for the development of the agricultural sector as a whole, and the development of rural areas of the republic in particular, since a very large proportion of the rural population is engaged in the production of grain .

In addition, as you know, grain is an important strategic export product,  an essential part of the foreign trade balance of the Republic of Kazakhstan.

At the same time, grain production in Kazakhstan is a high-risk kind of business. In international practice, regulation and maintenance of risks of the turnover at the best are achieved through mechanisms of exchange of risk hedging. The Exchange tool is one of the available investment vehicles. Due to the above factors, it is very important to the formation of a highly organized grain market on the basis of international standards that meet the requirements of both domestic and foreign markets. Through the project of the ETS in the market there has emerged technical feasibility able to run exchange trading goods.

However, to further enhance exchange activities in the country the compliance with the technology of tools turnover of  the current market situation and the important participation of all stakeholders in the formation of exchange technologies. In this regard, the development of the domestic grain market, I think the initiative to establish the Committee on Grains at the UTS timely and relevant.

 

What public organizations have joined the Committee for Grain at the Commodity Exchange of the ETS?

The structure of the specialized committee included representatives of all stakeholders - the exchange of ETS,  Food Corporation and other subsidiaries JSC

"KazAgroMarketing" and JSC "KazAgroGarant"  of the holding "KazAgro", brokerage firms - members of the Section of agricultural trade of ETS, associations representing the interests of grain producers and grain processors: "Grain Union of Kazakhstan", the "Union of Grain Processors of Kazakhstan", "Farmers' Union of Kazakhstan," NECK "Union" Atameken ", etc.

To date, the OTC market of grain consists of a large number of participants, in particular, agricultural producers, processors, trading companies, international purchasing companies, etc. But, unfortunately, none of them have the possibility to plan their activities. To implement the plan there are not available fair value indicators in the grain market. In the OTC market is not provided with liquidity, there is no equal access of the participants  to foreign markets, in connection with the use of traditional paper-based technologies mechanisms of the transaction are complicated. Technologies and forms of trading, providing  at most the risks  of the participants it is impossible to  achieve without the introduction of exchange technologies. The whole set of serious issues is addressed by ensuring standards of trading.

The organization of these markets, to attract the maximum number of participants in the organized exchange commodity market, ensuring the development of recognized indicators - are the main goals and objectives of the Committee.

 

What issues were raised at the first meeting of the members of the Exchange Committee on grain?

Results of the first meeting of the Committee members have shown the interest of the participants in the discussion of agenda items, demonstrated the timeliness of the creation of this interactive platform of state-owned operator, participants of market  and exchanges. Within the events there has been was formed sufficiently intense action plan.

At the first stage  the ETS Commodity Exchange has undertaken jointly with industry-governmental organizations to implement this year, the required number of training seminars. For their part, public sector organizations have expressed the intention to provide accreditation to the maximum number of participants. Food Corporation plans to establish on the basis of exchange technologies available and transparent turnover of grain within the government programs.

These plans, first of all, have a common objective - to provide an organized  liquid market of the Kazakhstan's grain to form a recognized value indicators of Kazakhstan's grain.

 

In your opinion, what will be the successful functioning of this committee?

The success of the Committee depends first and foremost on the cover of the maximum number of participants and their attraction to these trades.

Selling of grain of Food Corporation in the amount of more than 1 million tons held at the end of last year at the Commodity Exchange ETS in the  mode of anonymous electronic auction are  breakthrough for the market. This is the first experience, providing access for all stakeholders to  trading.

Implementation of our initiative on establishing the Exchange Committee for grain is the basis for the possibility of organizing a transparent and liquid market for grain in Kazakhstan, as the volumes represent a significant part  on the  grain market share of the country as a whole.


Maxim Azarov, 

"Капитал", 28.02.2013