Annual report 2016

Commodities market

Trading volume, RUB billion

On-Exchange Grain Trading

In 2016, Moscow Exchange continued to develop the Grain Market by expanding the product line, engaging new participants and implementing technologies in order to increase liquidity and thereby ensure transparent domestic price discovery.

In late December 2015, the Grain Market was launched on the National Mercantile Exchange, a part of Moscow Exchange Group. Exchange trading initially included deliverable forward contracts with wheat as the underlying asset, with barley and corn being added in November 2016. The Grain Market currently has over 20 accredited grain elevators.

The National Logistics Company organises transportation, alongside survey companies. Grain is stored in accredited grain elevators. NCC Clearing Bank performs the functions of central counterparty to the trades, as well as the operator of commodities deliveries.

Trading participants are offered forwarding services unparalleled in Russian and global exchange-based trading. The service allows the buyer to purchase commodities on condition of delivery to any railway station in Russia.

The first grain batch from the Volgograd Region's grain elevator was delivered to the Novorossiysk station for subsequent export.

Moscow Exchange Group, Rusagrotrans and the Russian Grain Union hosted the Grain Business Infrastructure – Logistics and Finance joint conference, which was attended by representatives of major agricultural holdings, grain traders and infrastructure organisations. The topics discussed included on-exchange grain trading and prospects for further improving infrastructure.

Government Interventions in the Grain Market

In 2016, 1.3 mn tonnes of grain worth some RUB 12.5 bn (vs. RUB 22.4 bn in 2015) was sold via government procurement interventions in the grain market.

Authorised by the Ministry of Agriculture, the National Mercantile Exchange has, since 2002, been involved in government commodity and procurement interventions in the grain market.

In 2016, 657 agricultural production participants were involved in procurement interventions.

Precious Metals Trading

In 2016, total trading volumes in the Precious Metals Market grew by 33% to RUB 125 bn, with physical volumes equal to 46.7 t of gold and 1.7 t of silver.

Gold and silver are traded on the FX Market platform using a unified system of margining and risk management. Trading collateral is accepted in RUB, USD, EUR and CNY, as well as precious metals.

In 2016, nine new organisations joined the Precious Metals Market. At the end of 2016, trading involved 64 organisations: 51 banks (including the Bank of Russia) and 13 investment companies. To provide liquidity for the main market instruments, market makers continued to operate under agreements with Moscow Exchange. Six non-banking institutions provide direct market access (DMA) for their clients, both individuals and legal entities.