Long-Delayed Wheat Futures Trading Starts

Russia, one of the world's major grain exporters, on Wednesday began trade in wheat futures aimed at adding transparency to its opaque domestic grain market and allowing traders to hedge risk as prices hit record highs.

Eight brokerages were participating on the first day of trade on the Russian National Mercantile Exchange, or NAMEX, said Sergei Naumov, director of the exchange.

"The launch of wheat futures contracts means that we are becoming civilized participants in the global economy," Agriculture Minister Alexei Gordeyev said at the launch ceremony.

Naumov named major domestic trading companies like Agromarket-Trade, Razgulyai and the International Grain, a Russian subsidiary of Swiss commodities trader Glencore, among acting or future clients of the eight active brokerages.

NAMEX initially planned to launch wheat futures in mid-2007 but postponed the start for technical reasons. It was delayed again after the country introduced prohibitive wheat export tariffs from Jan. 29 to July 1.

"We believe this project will be a success, as it has been prepared in close cooperation with grain producers and traders," Arkady Zlochevsky, head of powerful industry lobby the Russian Grain Union, said at the ceremony.

NAMEX, founded by seven foreign currency exchanges, industry lobbies and large agribusiness firms, is involved in the sale of grain from government stocks to flour mills aimed at stabilizing domestic grain prices.