On September 3, a regular meeting of the BRICS Working Group for the Research of Competition Issues in Food Markets was held in Johannesburg as part of Russia`s BRICS Chairship. During the meeting the group members agreed to conduct a joint study of the grain trade market within BRICS. The meeting was moderated by Hardin Ratshisusu, Deputy Commissioner of the South African Competition Commission.
Despite their differences, all BRICS countries are interested in ensuring efficient and fair functioning of food markets and in providing affordable food to their citizens, said Doris Tshepe, Commissioner of the Competition Commission of South Africa. In her welcome speech, she stressed that food sector problems are cross-border in nature and can only be solved through active cooperation between regulators from different countries and in cooperation with international organizations.
“Only by collaborating with international organizations and aligning our efforts within a global framework, we can more effectively address the challenges of food security, competition and sustainable development,”
she said.
An effective joint action could be a sectoral study of the grain trade market within the BRICS framework, says Alexey Ivanov, Director of the BRICS Competition Law and Policy Centre. Grain markets are a very important and poorly understood element of the global food chain. These markets are volatile and highly concentrated, which negatively affects both farmers and consumers. Meanwhile, significant deals in the sector, such as Bunge-Viterra merger, are not receiving the attention they deserve from antitrust authorities.
“This deal got clearance from some of the authorities, including those from the BRICS countries, on the basis of traditional economic analysis, which doesn’t take into account the impact of the merger on the global context and the entire food value chain,”
Ivanov emphasized.
The BRICS Grain Trade Market Study is also relevant to the BRICS countries because they include both large grain producers, such as Brazil and Russia, and large importers, such as Egypt and China, which purchase large quantities of grain products from around the world.
The International BRICS Competition Centre is developing a questionnaire that will help identify the current challenges that BRICS antitrust regulators face in analyzing grain market transactions in the context of global food chains. Based on the responses received to the questionnaire, as well as the experience of UNCTAD and other international organizations such as the UN Food and Agriculture Organization (FAO), a joint analysis framework for the study of grain markets will be defined.
“I think that the global grain trade issue is interesting for BRICS countries, our consumers and producers, and that the situation in this sector looks like a real dysfunction of the current global capitalist system, which was mentioned by many researchers,”
Alexey Ivanov concluded.
The joint study will make it possible to assess the effectiveness of the existing antimonopoly measures regulating the agricultural markets of the BRICS countries, as well as to develop new antitrust tools to reduce the negative effect of price volatility in global food markets, said Andrey Tsyganov, Deputy Head of the FAS of Russia.
“Moreover, the BRICS countries, including South Africa, Brazil and Egypt, are already conducting very important research of food markets, and their methodological approach and practical experience will certainly be used in our joint study.”
The Working Group participants supported the idea of a joint study and described the experience of market studies in their jurisdictions. Ms. Rowan Wael Aziz, Economic Researcher of the Egyptian Competition Authority, presented a report on a method and tools for value chain analysis in the food sector. It was based on the commodity chain analysis module developed by FAO.
“So, basically, the framework starts with the market definition, then we study the supply chain and start building a market profile. After that, we move on to determining the degree of market concentration, analyzing prices and finally to government policy and regulatory measures.”
An economist of the Competition Commission of South Africa outlined the challenges identified in his research on the country's fresh produce market and poultry sector. These included high market concentration, vertical integration of companies and the consolidation of market power of large retailers.
“This is an observation we made across all value chains. Poultry is just one example. We have also observed the same in the grain market,”
emphasized the speaker.
Ms. Qi Shuanglin, Director of Antimonopoly Enforcement Department of the State Administration of Market Regulation of China (SAMR), highlighted SAMR's role in ensuring China's food security. The regulator takes into account the rapid digitalization of the agri-food sector and its impact on the environment and makes additional adjustments and tools in regulation in accordance with new challenges.
Brazil's regulation of food markets was presented by Ms. Carolina Saito da Costa, Head of the Antitrust Analysis Unit at the Administrative Council for Economic Defense of Brazil (CADE). In the last 10 years, the agency has registered about 500 mergers in the retail sector and notes the increasing concentration of the economy as a whole. Sectoral studies of food markets and a general focus on competition advocacy activities, as well as increasing international cooperation, are key aspects to address the problem of information asymmetry and make more efficient decisions, CADE representative believes.
Teresa Moreira, Head of the Competition and Consumer Policies Branch at the United Nation Conference on Trade and Development, pointed out that the COVID-19 pandemic, the economic crisis and geopolitical tensions in the world have had a very negative impact on achieving of the UN Sustainable Development Goals (SDGs). In particular, Goal №2 entitled “End hunger, achieve food security and improved nutrition and promote sustainable agriculture.” In order to achieve this goal, it is necessary to join efforts, she is convinced:
“We will continue the work in this direction, gather more information, cooperate with the BRICS Competition Law and Policy Centre and of course with the competition authorities of the BRICS member states present here.”
Teresa Moreira endorsed the initiative to conduct a joint BRICS grain trade market study and suggested that in the future a similar study on concentration in the maritime transportation market should be conducted.
The importance of the BRICS countries' position in the fertilizer market, which is a crucial part of the global food value chain, was noted by Rodrigo Carcamo-Diaz, Economic Affairs Officer at UNCTAD. Thus, Russia and China account for 19% and 15% of global production of complex NPK fertilizers, respectively. Russia is also the second largest exporter of potash fertilizers after Canada. At the same time, the BRICS countries - Brazil, India and China - are also among the largest importers of fertilizers.
The meeting concluded with a report on the state of food security and nutrition in the world, delivered by Dr. Babagana Ahmadu, FAO Representative in South Africa. According to the report, between 713 and 757 million people in the world ( one in every 11 people globally) faced chronic hunger in 2023. Regionally, hunger continues to rise in Africa, where one in five people face it. It is projected that 582 million people will be chronically undernourished in 2030,, with Africa accounting for more than half of the total.
“The world is not on track to reach any of the seven global nutrition targets,”
stated the FAO representative.
While food systems can become more efficient, inclusive, resilient and sustainable by 2030, achieving this goal will require coordinated action at all levels and involving all stakeholders. Globally, such a transformation requires additional $300-350 billion in annual capital investment through 2030.
“These costs seem high but the cost of non-intervention will be even higher. In addition, it is estimated that the total economic benefits of investing in transforming land use and food systems could be $5.7 trillion per year by 2030 and $10.5 trillion per year by 2050,”
noted Babagana Ahmadu.
The participants of the Working Group agreed to continue working together to achieve SDG No. 2, and the BRICS grain market survey will help to identify “bottle necks” in the global food value chain.
“The results of this study we will discuss at the BRICS conference in Cape Town in 2025,”
summarized Andrey Tsyganov.
The BRICS Working Group was established in 2015, when Russia held the BRICS chairmanship. The group was engaged in researching competition issues in global food markets. It was then that the format of work was tested for the first time, in which the scientific circles of the BRICS countries united to assist antimonopoly agencies. The scientific and expert support to the BRICS Working Group on Food Markets is coordinated by the International BRICS Competition Law and Policy Centre and includes antitrust and agri-food market regulation scholars from all BRICS countries.
