Experts from HSE University and BRICS Anti-Monopoly Authorities Analyse Global Grain Market

Photo: bricscompetition2025.co.za

The International BRICS Competition Law and Policy Centre at HSE University presented the scientific report ‘From Fields to Futures: Competition, Financialisation, and Digitalisation in Global Grain Value Chains.’ The document was prepared as part of expert support from the BRICS Working Group on Competition Research in Food Markets. The presentation took place at the academic conference ‘Emerging Challenges of Competition Law and Policy in the BRICS and Beyond’ on September 12, 2025, in Cape Town (South Africa), which the BRICS Centre organised together with the University of Cape Town on the sidelines of the 9^th BRICS International Competition Conference.

The grain trade market is not only essential for the food security of tens of millions of people, particularly in the countries of the Global South, but also serves as a significant source of income for farmers, agricultural producers, and infrastructure operators, such as those in Russia and Brazil, which are export-oriented countries. This report represents the first attempt to conduct an analysis of the grain market in collaboration with the anti-monopoly authorities of the BRICS countries. It aims to enhance the coordination of regulators in the agricultural sector.

The study proposes an innovative approach to market analysis, focusing on global processes. Rather than the traditional antitrust approach that concentrates on horizontal competition, this study shifts the focus to vertical competition—the interaction between various levels of the supply chain, from manufacturers and traders to infrastructure operators and financial intermediaries. The report specifically examines the activities of global grain traders within the context of economic and technological changes in the markets of the BRICS countries.

The global grain market has long been controlled by the oligopoly of the major agricultural commodity traders from the ABCD+ group (ADM, Bunge, Cargill, Louis Dreyfus Company + COFCO, Olam, etc.). This concentration of market power, as well as certain structural features of the market, make it vulnerable to price fluctuations and various kinds of speculative behaviour, which negatively affects the activities of both grain producers and grain consumers in the BRICS countries. It creates risks for global food security and sustainable economic development of the agro-industrial complex in these nations.

The centre’s researchers noted and described several significant trends that have a direct impact on farmers, consumers, and the grain trade worldwide today. First of all, a large factor is financialisation, that is, a tight bundle of financial and trading infrastructure. Grain trading is now increasingly accompanied by financial speculation affecting global prices. Grain traders engage in large-scale shadow banking activities, which become more profitable for them than actual grain trading. This phenomenon falls outside the scope of traditional antimonopoly analysis. At that, even instruments originally designed to hedge risks are being misused, serving as a cover for pure speculation rather than managing volatility.

The financial activity of traders is made possible by information asymmetry—access to exclusive data that other market participants do not have. As the ABCD+ group strengthens its control over logistics and infrastructure, its information advantage is growing. Traders gather this data from various participants in the commodity distribution chain, such as farmers, local networks, and consumers. They turn this insider knowledge into a valuable tool for their speculative activities.

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Digital platforms are contributing to this trend. Grain traders receive a large amount of information about flows, stocks, and prices through these platforms. These technological solutions create a favourable environment for coordinated economic activity and price collusion, which allows traders to act as a quasi-cartel. Platforms like Covantis and TRACT help ABCD+ traders to coordinate their economic activities and limit competition from national and regional players, often without the knowledge of BRICS anti-monopoly authorities.

The next trend is the growing corporate connectivity and collaboration among global traders, including through simultaneous participation of institutional investors. This is leading to the emergence of a new form of interaction—co-opetition—which is cooperation in a competitive environment. Despite the struggle for profit and market share, companies are jointly investing in infrastructure and coordinating supply chains. For the first time, this report presents unique models of corporate relations and the involvement of strategic investors in the operations and management of ABCD+ traders.

Against this background, the researchers propose that the BRICS countries collaborate to develop a coordinated approach to addressing anti-monopoly issues. They suggest involving anti-monopoly regulators in the design of the BRICS Grain Exchange, which would act as a single platform providing transparent pricing and clear hedging mechanisms essential for effective trading. The creation of the Grain Exchange was initiated by BRICS leaders. If implemented correctly, this could lead to reduced price volatility, increased pricing transparency, and improved market competition in the global grain market.

The authors of the report emphasise the importance of eliminating information asymmetries for the successful operation of the exchange. It is critical to address data on grain stocks in key logistics hubs, which are currently only available to global traders. Through the implementation of antitrust measures, these traders could be required to share this information, thereby reducing opportunities for speculation and promoting a more inclusive and sustainable model for the exchange’s operation.

Alexey Ivanov

Alexey Ivanov, Director of the International BRICS Competition Law and Policy Centre, Professor at the HSE University’s Faculty of Law, explains, ‘Historically, the grain market was controlled primarily through administrative methods, especially until the 1970s and 1980s. Later, the influence of market mechanisms and privatisation increased, but anti-monopoly regulation developed poorly. The grain market found itself in a grey area between the government and free market, which created conditions for the emergence of large players with enormous market power. The experience of anti-monopoly authorities in the digital space has shown that the passivity of regulators leads to increased dominance and abuse. Today, regulators around the world are actively involved in regulating the digital market. This lesson applies to the grain industry, and before it’s too late, agencies should pay closer attention to grain markets and the actions of global grain traders. One conclusion we have reached in our report is that the proactive approach taken by anti-monopoly authorities in the digital sector today should be applied to agricultural markets.’