The International BRICS Competition Law and Policy Centre at the National Research University Higher School of Economics (HSE University) presented a research report titled “From Fields to Futures: Competition, Financialization, and Digitalization in Global Grain Value Chains.” The report was prepared as part of the expert support for the BRICS Working Group for the Research of Competition Issues in Food Markets. The presentation took place during the academic conference themed “Emerging Challenges of Competition Law and Policy in the BRICS and Beyond” on September 12 in Cape Town, South Africa. The BRICS Centre organized the event in collaboration with the University of Cape Town on the sidelines of the IX BRICS International Competition Conference.
The grain trade market today is not only a cornerstone of food security for tens of millions of people, particularly in the Global South. It is also a key source of income for farmers, agricultural producers, and infrastructure operators in export-oriented countries such as Russia and Brazil. This report represents the first attempt to conduct a joint analysis of the grain market in cooperation with the BRICS competition authorities and aims to enhance regulatory coordination in the agricultural sector.
The study introduces an innovative approach to market analysis from the perspective of global processes. In contrast to the traditional antitrust focus on horizontal competition, the emphasis here shifts to vertical competition — the interactions among different levels of the supply chain, from producers and traders to infrastructure operators and financial intermediaries. Particular attention is given to the operations of global grain traders amid the economic and technological transformations occurring in the markets of BRICS countries.
The global grain market has long been dominated by an oligopoly of major agribusiness trading companies known as the ABCD+ group (ADM, Bunge, Cargill, Louis Dreyfus Company, along with COFCO, Olam, and others). This concentration of market power, combined with certain structural characteristics of the grain market, renders it vulnerable to price volatility and various forms of speculative behavior. Such dynamics have adverse effects on both grain producers and consumers in BRICS countries, posing risks to global food security and undermining the sustainable development of the agricultural sector within the bloc.
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Researchers at the Centre have identified and described several key trends that currently exert a direct impact on farmers, consumers, and grain trade worldwide. Foremost among these is financialization, i.e., the deep integration of financial and trading infrastructures. Grain trade is increasingly accompanied by financial speculation that significantly influences global price formation. Grain traders are engaged in large-scale shadow banking operations, which often prove to be more profitable than the trade in grain itself. This phenomenon largely falls outside the scope of traditional antitrust analysis. Moreover, even instruments originally designed for risk hedging are increasingly misused: instead of mitigating volatility, they are repurposed as vehicles for purely speculative manipulation.
The financial activities of traders are enabled by information asymmetry — specifically, privileged access to exclusive data unavailable to other market participants. As the ABCD+ group consolidates its control over logistics and infrastructure, its informational advantage continues to expand. These traders collect data across the entire commodity supply chain — from farmers to local networks and consumers — transforming insider knowledge into a core instrument of speculative activity.
Digital platforms are amplifying this trend. Grain traders increasingly rely on such platforms to access large volumes of data on flows, inventories, and prices. At the same time, their technological solutions de facto create an enabling environment for coordinated economic behavior and price collusion, effectively allowing traders to operate as a quasi-cartel. Platforms such as Covantis and TRACT already facilitate coordination among ABCD+ traders, enabling them to restrict competition from national and regional actors — often outside the purview of antitrust authorities in BRICS countries.
The next notable trend is the growth of interlinkages between corporate groups operated by traders, including through the joint involvement of institutional investors. A specific form of interaction is emerging — co-opetition (cooperative competition). Despite competition for profits and market share, companies are increasingly engaging in joint infrastructure investments and exercising coordinated control over supply chains. The report presents, for the first time, unique diagrams illustrating corporate linkages and the involvement of strategic investors in the operational and governance structures of ABCD+ traders.
© HSE University
Against this backdrop, the researchers propose that BRICS countries develop a coordinated antitrust response and actively involve competition authorities in the design of the BRICS Grain Exchange — envisioned as a unified platform with transparent pricing and clear, accessible hedging mechanisms essential for the efficient organization of trade. The establishment of the Grain Exchange was initiated by the leaders of the BRICS countries. If implemented effectively, it could represent a significant step toward reducing price volatility, increasing pricing transparency, and improving the quality of market competition in the global grain trade.
The authors of the report emphasize that for the exchange to function successfully, it is critical to eliminate information asymmetry, particularly regarding data on grain reserves at key logistical hubs —information currently monopolized by global trading firms. Through antitrust measures, these firms could be compelled to disclose such data, thereby limiting opportunities for speculative manipulation and ensuring the exchange operates in a more inclusive and resilient manner.
Alexey Ivanov, Director of the International BRICS Competition Law and Policy Сentre, and Professor at the Faculty of Law, HSE University, explains:
“Historically, the grain market was predominantly governed through administrative means, particularly before the 1970s and 1980s. Later, market mechanisms and privatization gained influence, but antitrust regulation remained underdeveloped. As a result, the grain market emerged as a gray zone between state governance and the free market, creating conditions for the rise of powerful actors with significant market dominance. The experience of competition authorities in the digital sphere has shown that regulatory inaction leads to the entrenchment of dominant players and the proliferation of abusive practices. Today, regulators around the world are increasingly active in the digital economy. This lesson is equally applicable to the grain market. While there is still time, we urge authorities to pay closer attention to the grain sector, and to the activities of global grain traders in particular. One of the key conclusions of our report is that the proactive stance adopted by competition agencies in the digital domain should be extended to agricultural markets as well.”
Source: HSE University
