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The Head of VTB Proposes to Restrict the Business With Agricultural Commodities of Global Traders

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The head of VTB, co-owner of grain holding Demetra holding, Andrey Kostin, proposed to President Vladimir Putin to seriously restrict the work of global agricultural traders in Russia, writes Kommersant. He offers to ban companies from “unfriendly countries” from buying and reselling grain and oilseeds, including for export and from owning handling and storage facilities. Experts and market participants see the implementation of initiatives as a threat to competition and the use of the potential of grain exports from the Russian Federation.

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Andrey Kostin, president and CEO of VTB, addressed Russian President Vladimir Putin with a proposal to restrict the work of global traders in the Russian grain market. Reuters reported this on Thursday, citing a letter. Kommersant also has a copy of the complaint.

As Mr Kostin writes, five international traders and four American companies play a “key role” in Russian grain exports, accounting for 25-30% of purchases and about 70% of deliveries to foreign markets. This makes Russia an element of the U.S. “grain world order,” the letter says. Moreover, the VTB chief added that exporters from “unfriendly countries” own about 15% of port facilities in the Azov-Black Sea basin, allowing them to draw additional profits from trade in Russian grain.

Andrey Kostin proposes that Vladimir Putin issued a decree prohibiting organizations belonging to individuals associated with “unfriendly states” from buying and reselling pulses, oilseeds, and processed products, as well as subsequently exporting them to the Russian Federation.

The exception is the sale of processed products within the country. At the same time, Russian operators should not be prohibited from selling crops to global traders on FOB (port of shipment) terms.