The Russian Union of Industrialists and Entrepreneurs (RUIE) has asked deputy prime minister Dmitry Grigorenko to significantly change the bill on the mandatory 25% sale of some exchange-traded products.
According to the bill, the Russian government will be able to set target values for companies to sell goods at the exchange. The target values cannot exceed 25% of the volume of monthly production or the average volume of its sales per month over the past three years, taking into account affiliates and intermediaries.
The proposal concerns a wide range of goods: fish and seafood, grains, oilseeds, sugar beets, sunflower oil, white sugar, feed products, construction and mineral materials, coal, petrochemicals and basic chemicals, fertilizers, polymers and plastics, timber, unprocessed wood of various types, precious metals and stones, metals and metal products such as slabs, reinforcement, steel scrap, cast iron, nickel, aluminum, cobalt, lead.
"RUIE believes that the obligatory sale of significant volumes of products at organized auctions means a departure from the principles of freedom of contract ... [and] puts producers on unequal terms," the association noted.
The list of goods for mandatory exchange sale was subject to significant criticism. Thus, in non-ferrous metallurgy, the high export orientation of sub-sectors will hinder compliance with the standard.
"With regard to nickel, aluminum, copper, cobalt, gold, silver, platinum, and palladium mentioned in the bill, it should be noted that the production of non-ferrous and precious metals in Russia exceeds their consumption many times over. For example, the share of the domestic market in total sales of nickel is about 15% - 20%, aluminum - 20% - 25%, which means that more than 75% of these non-ferrous metals are exported. At the same time, the needs of the domestic market are completely covered by direct contracts with consumers (without the participation of metal traders)," RUIE noted.
Theodor Lisovoy, Managing Editor, Rough&Polished
