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Towards a common grain platform for the Ukraine, Russia and Kazakhstan?
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02 May 2011 |
The Ukraine, Russia and Kazakhstan are in negotiation to form a "pool" designed to stabilize grain markets.
According to information from the Russian news agency Itar-Tass, followed up by the French weekly Agrapresse, the leaders of three countries representing about 30% of world grain exports would like to organize and coordinate the sale of their grain in order to meet their customer expectations and stabilize agricultural markets.
“It would be reasonable to coordinate our actions so that the market situation is predictable and controllable”, said ukrainian Prime Minister Nikolai Azarov. “Such a group will become an important stabilizing factor for both market supply and grain prices”.
Remember that in 2010 Russia was hit by an unprecedented drought that destroyed some of its wheat crop, destabilizing entire agricultural markets. At that time, Moscow asked Kiev and Astana to make up for their grain deficit.
This willingness to share risk is a strong sign that Russia, Ukraine and Kazakhstan are leading towards the establishment of a regional policy as is already the case on other continents. Moreover, such an “alliance” will certainly lead to the region’s stronger economic position on global agricultural markets, but also its political weight in international decision making.
This platform does have the merit of being a relevant alternative to declining multilateralism, as demonstrated by the successive failures of WTO ministerial meetings. Could this decision be seen as a medium-term way forward in international trade relations, by the constitution of regional, homogenous trading blocs?
However, if such a device is to see the day, several questions should be asked concerning its modalities, operation and positioning with regard international balance: How would it work in practice? How can the sustainability of such an alliance be ensured? How can this alliance be prevented from becoming a “cartel”? |
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