SHANGHAI, March 14. /TASS/. The St. Petersburg International Mercantile Exchange (SPIMEX) plans to start trading with China by the end of April or the beginning of May, Senior Managing Director Alexey Ryzhikov told TASS.
Agreements with major Chinese lumber companies have already been signed, and a working group and roadmap have been formed with the government of the city of Hunchun in the northeastern province of Jilin), he said. "We are moving toward the start of trading, roughly at the end of April or the beginning of May. Having received the first portion of information last year, we formed a working model and started laying down rules, adjusting our programs to this model, which we believe is quite sufficient for getting things going. Later, we will put the finishing touches on it," he said.
The exchange tested out a program working with Chinese lumber companies in the Far East back in 2019, before the pandemic, Ryzhikov noted. The project was successful, though it was frozen due to anti-COVID restrictions. "The project was put on pause, but the groundwork was laid," he said. The exchange is ready to provide a mechanism that will put Chinese partners at ease over a whole number of issues (for example, regarding the quality of products and logistics), while Russian producers - they can count on guaranteed payment, the head of the exchange added.
At the initial stage, trading with China will involve lumber, while in the future the range of goods may be expanded, Ryzhikov said. Trading will be conducted "as experience is accumulated, and volumes boosted" as "technology is polished," he stressed. However, "an optimal model" will eventually be created, a model that is different from what everyone is accustomed to, the official said. "These are not futures contracts, not derivative transactions, this is trade in real goods with guaranteed presence of these goods, with money, with control over the movement of those goods. Everything will be provided in a common package," he concluded.