+ 825 million UAH of income for the State: the NSSMC summed up the results of timber trading on the organized commodity market

The growth of timber sales volumes on commodity exchanges, the formation of a market model, preparation for the entry of two new commodity exchanges in addition to the two existing ones – these are the results of the segment’s work this autumn.

This was announced by the NSSMC (National Securities and Stock Market Commission) at a meeting of the Subcommittee on Capital Market, other regulated markets, securities and derivatives of the Finance, Tax and Customs Policy Committee. According to the website of the NSSMC the meeting was dedicated to the first results and prospects of the functioning of commodity exchanges after the legislative regulation of its work.

“Finally, the organized commodity market provides new opportunities for legal and clear trade. The market participants expected this, the State was out for it. Together with the beginning of the reform of the capital market and organized commodity markets, we received a new regulated segment in the summer of 2021. This is a story not only about standardized, licensed, transparent work, it is a story about the partnership and early successes,” says Ruslan Magomedov, the Chairman of the NSSMC.

For example, according to the results of the work of the UEEX (the Ukrainian Energy Exchange), one of the largest domestic commodity exchanges, in October the State received 825 million UAH of the additional income from unprocessed timber, exposed on the tender.

“We are now the witnesses and participants of the initial market opening. At this stage of development, we form the relationships, and directly create the market. The market is filling with the participants. Therefore, two platforms are currently operating, and we expect that two more exchanges will receive licenses to conduct trading on the commodity market soon. I also want to note that the spot market will help to create the new financial instruments and to hedge the risks on the capital market. A new model of the commodity market will allow us to talk about the stability of supplies and predict the cost of commodities. I am convinced that we will continue to be able to talk about the increasing of the processes’ transparency in the Ukrainian Commodities and Capital Market and, as a result, to promote the formation of fair market prices for basic commodities.” adds the Chairman.

We recall that the trading in standardized commodities (such as grains, wood, fuel, etc.) switched to licensed exchange platforms since July 1, 2021. This means that standardized commodities are now sold on the licensed exchanges. The Regulator, the National Securities and Stock Market Commission, is responsible for licensing them. The exchanges should monitor the trading to prevent manipulation and insider trading.