In an attempt to create a common grain pool, Former soviet states of Russia, Ukraine and Kazakhstan, accounts for 30% of global grain export market, have decided to speed up efforts in this regard.
In an attempt to create a common grain pool, Former soviet states of Russia, Ukraine and Kazakhstan, accounts for 30% of global grain export market, have decided to speed up efforts in this regard.
The pool one established would allow the group to compensate for any export shortfall in one of the producers thus keeping the market stable. Severe drought and fires last summer destroyed large swathes of Russia’s and Kazakhstan’s wheat, prompting the government to place a ban on exports which led to global prices reaching two-year highs.
The three fellow ex-Soviet republics have cooperated in the past. In 2003 Kazakhstan and Russia supplied grain to Ukraine when the Eastern European country ran out of reserves. During the Soviet era Ukraine produced around 25 percent of the union’s agricultural output, earning it the nickname bread basket of Europe. Analysts said the creation of the grain pool will be a serious stabilizing factor in the context of volumes of supplies and in the context of prices.
In 2007, the Russian Grain Union moved forward with an initiative to create the Black Sea grain pool between Russia, Ukraine, and Kazakhstan with an opportunity for further membership for other countries, including Hungary, Bulgaria, Romania, and Turkey. In 2009, the Ukrainian Grain Association said the Black Sea grain pool would not benefit Ukraine.Source: Commodity Online
