Vedomosti

Grain exchange

To prevent bread prices from escalating, the Federal Antimonopoly Service has suggested returning to the experience of the early 1910s - to the grain exchange. Some officials and market participants doubt the efficiency of this measure.

"Production and distribution chains have used dozens and even hundreds of intermediaries in many regions for several years," Igor Artemyev, head of the service, told Russian Prime Minister Vladimir Putin on Friday. Each resale increases the grain price and the only radical way to deal with this is to set up a grain and flour exchange like as in pre-revolutionary Russia, Artemyev said. He suggested that all grain export contracts and 15% of the domestic turnover should be traded on the exchange. Putin agreed and instructed the Antimonopoly Service and the Ministry of Economic Development to take steps towards establishing such an exchange.

This project does not include setting up a new exchange, Artemyev explained, but envisages improving the regulations for the National Commodity Exchange, operating under the Moscow Interbank Currency Exchange (MICEX) and trading grain futures contracts.

"They haven't approached us yet," a MICEX spokesperson said. "But everything is ready for the National Commodity Exchange to be used as a new grain exchange." The spokesperson explained that the commodity exchange includes a forward market trading grain futures contracts, including export contracts.

On June 21, the St. Petersburg International Mercantile Exchange hosted its first grain trading, the exchange's Deputy President Timur Khakimov said. Khakimov explained that trading in the grain section has not involved significant volumes or the number of participants yet and that the trading has been suspended due to the tense market situation resulting from the drought.

A crucial question now is how to make the grain exchange attractive for producers and consumers, said Teimuraz Kharitonashvili, a department head at the Antimonopoly Service, adding that the service is working on this issue. Alexander Pirozhenko, a department head at the Ministry of Economic Development, said the service's proposal will be scrutinized but refused to go into detail.

An employee of the Government Staff referred to the Antimonopoly Service's idea as good but hardly feasible: the grain market is quite competitive and includes many companies, and it is impossible to make them all trade on the exchange. Anyway, transitioning all export contracts to exchange mechanisms will take several years, the expert emphasized.

The main issue of Russia's grain exchange is its insufficient liquidity due to the insufficient number of sellers and buyers, CEO of Aston grain-exporting company Vadim Vikulov said. In addition, Russia has rather a modest grain market, which produced 46.2 million tons in 2009 in comparison to Europe's 128.9 million tons and the United States' 61.6 million tons, which is why the exchange trading in Russia is rather sluggish, Vikulov explained.

Russia needs a grain exchange but not in the form that it is currently being developed. The area where the grain is stored is too big, owner of Valars Group Kirill Podolsky believes. He suggested that a Black Sea Exchange should be set up, which in addition to Russian grain could trade in grain from Ukraine and Kazakhstan.

Izvestia

High revenues from spent nuclear fuel

Russia has agreed to re-import spent nuclear fuel from Germany, once dispatched there from the Soviet Union.

During the operation of a nuclear reactor, the amount of fissile fuel in it steadily decreases until the need arises to replace the old fuel rod with a fresh one. But the spent fuel remains highly radioactive and very dangerous. It is usually uranium or plutonium compounds in powder form. The fuel needs either to be recycled or disposed of in such a way as to avoid any contact between the radioactive material and human beings for a thousand years.

Only a few countries, including Russia, have factories for processing spent fuel. Processing and even burying "foreign" fuel is a paying business, which theoretically can earn Russia hundreds of millions of dollars annually. However, it is not known how much Rosatom, Russia's state-owned nuclear power agency, is currently earning from this processing as the information is classified.

Next year, a thousand spent fuel rods from the reactor at the nuclear research center at Rossendorf, near Dresden, will be returned to Russia via the Baltic Sea for recycling. The reactor was built in 1957 in the German Democratic Republic (East Germany) by Soviet specialists. The Soviet Union also supplied fuel for it. In 1991, the reactor was shut down and the fuel moved to a temporary storage facility for the past five years.

Naturally, the announcement of the forthcoming nuclear fuel transportation provoked protests from environmentalists. They always put up a fight on such occasions. It is true that transportation of radioactive materials is not a safe operation, but the experience gained ensures the highest degree of security. The only problem in the process was caused by the Greens, who lay down on the rails as a rods train approached. On one occasion a radioactive freight from Rossendorf had to be airlifted to Russia.

Now wildfires in Central Russia are causing great concern among the German environmentalists, which is strange as the fuel containers are made from particularly strong materials and are water and fire proof. It is the cost of the carriage, 10 million euros, that appears to be troubling the Green Party in the Saxony government.

Nezavisimaya Gazeta

On freedom of speech

Freedom of the press in Russia is again making headlines in the Russian and global media. Below is an abridged article Nezavisimaya Gazeta published in response to a commentary by Ingo Mannteufel, head of Deutsche Welle's Russian radio and online departments, Wildfires Bare Weaknesses in Putin's System.

The head of Deutsche Welle's Russian radio and online departments has significantly twisted Russia's facts and realities, although it should be admitted that the respectable online media source, run by an influential German radio station, published a fairly accurate and comprehensive analysis of the "August plague" that hit Russia this year. Still, Ingo Mannteufel has certainly let slip several unfortunate remarks that suggest the author's biased attitude toward Russian realities.

The most outrageous comment is his claim that there is no free press in Russia. "There is no public control in the country; neither is there a free press," the respectable editor-in-chief wrote. But is that so?

It is true that the federal government and most local authorities' policy is to exterminate major criticism in the media. Indeed many of the national media sources, especially TV channels, are directly or indirectly controlled by the government or pro-government industrial groups such as Gazprom. This could be reason to believe that freedom of the press is limited in Russia. Mannteufel was in fact correct in describing this as a weakness of the political vertical in Russia.

Yet, his claim that Russia has no free media is a lie; there are facts that refute this statement. As of July 2010, over 93,000 media companies were registered in Russia, with 90% of them private. Russian media often print reports of high-profile harassment campaigns against journalists or media companies, also discussed in the West, which suggest free media in Russia, although the government may try to influence them.

Curiously, most of the Russian major private media, including Nezavisimaya Gazeta, Kommersant and Vedomosti, run popular online editions, giving free access to their content to over 500,000 users daily. In Germany, most important newspapers, such as Handelsblatt, offer limited access to their online content (available to subscribers only).

Russian independent media do not charge their online readers in principle to ensure that larger audiences become familiar with independent viewpoints.

It is difficult to imagine that the editor-in-chief of Deutsche Welle's Russian edition is not familiar with Russian independent media. There are likely other motives behind his commentary.

Kommersant

Medvedev demands crackdown on market monopoly

First Deputy Prime Minister Igor Shuvalov reported to President Dmitry Medvedev on Saturday that the competitive environment has significantly worsened in Russia since the onset of the economic crisis in 2008. The president advanced a new theory on competition: he is convinced that competition declines as market players become more prosperous. This theory was immediately applied to the Russian regions and Moscow was pronounced guilty of having a poor competitive environment.

The government is drafting the third antimonopoly legislative package of amendments to the law On Protection of Competition. It is an attempt to repair the flaws of the second set of regulations drawn up by the Federal Antimonopoly Service (FAS) and approved by the government in 2009. The package has been widely criticized for introducing criminal liability for violations established by FAS expert assessment. The number of draft provisions expands the service's authority: in the past, its activity was limited to responding to complaints, but now it expects to be granted the right to conduct unscheduled inspections of organizations at its sole discretion.

The FAS report indicates that the World Bank Doing Business Ranking has lowered Russia's rating for competition development. The development of the competitive environment has declined considerably. Experts believe that the previous competition parameters will probably be achieved in twelve to eighteen months. "At present we have a number of rapidly growing sectors, where the level of competition is even higher than it was in 2008 or 2009. One of such competitive sectors is retail. However, we are also experiencing monopolistic trends that must be tackled urgently," Igor Shuvalov said.

However, the president found who to blame almost at once. "I think Moscow has a highly monopolized market, and the Moscow city government has a great deal to think about in this regard," Medvedev said. He went on to develop a new theory that explains everything: "Monopolies are easily created in big cities simply because a lot of money is concentrated there, considerable capital, and, naturally, the monopolistic trends are more pronounced there."

However the World Bank's research of the competitive environment in the ten largest cities of the Russian Federation does not confirm the president's ideas: No strong correlation between the gross regional product per capita and the place in the ranking (Moscow being the last, and Kazan being the first) has been discovered.

RBC Daily

Weather forecast worth 55 bln rubles

This summer's record heat wave in central Russia and its repercussions have prodded the Russian government to reconsider the way the national weather service works. The Natural Resources Ministry last week presented a draft strategy for hydrometeorology through 2030. The authors of the proposal believe the new strategy will save the country 55 billion rubles annually, which is nearly three times its cost.

Temperatures have been beating 100-year-old records almost every day for two months running, triggering a chain reaction: an unheard of drought has damaged crops sending consumer inflation soaring. Bread prices shot up 10%-15% in some Russian regions. Even businesses that do not directly depend on the weather have incurred losses.

The unusually hot weather has prodded the government to review the work of its weather service, Roshydromet. The Natural Resources Ministry has presented a draft strategy for the service's overhaul through 2030. The idea is to establish a highly effective meteorology service, which would provide consumers with prompt and reliable weather information.

The program would include a network that would monitor over 30 different indicators in the atmosphere (temperature, pressure, humidity, etc.), upper-air and water. The plan is to increase the number of weather stations from the current 1,691 to 2,300 including 600 new fully automated stations. Air pollution levels will be monitored in cities with a population over 100,000. The service's computer equipment would be upgraded every five years, and a major modernization is planned for the period between 2020 and 2030 to bring the Russian weather service up to international standards.

The strategy will be financed from the federal budget and the consolidated budgets of the regions, as well as extra-budgetary sources such as the service's own earnings. "No targeted federal program will be required to finance this strategy because there will be a state customer for the weather service's overhaul," the authors of the strategy said.

The overall economic effect of the strategy's implementation must exceed its costs by 180%.

The authors of the proposal believe that 20 years from now, the strategy would be saving the country 55 billion rubles ($1.8 billion) a year. During the first stage (2010-2012), it would yield an annual net profit of 23.6 billion, for the second stage (2013-2020), 33.6 billion, and the third (2021-2030), 53.5 billion rubles.

In 2008, the weather service's economic effect was 18.3 billion rubles ($601.6 million) and its financing about 8 billion; in 2007, 16.8 billion rubles and 7 billion rubles, respectively.

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MOSCOW, August 16 (RIA Novosti)