Romania boasts one of the biggest foreign currency markets in the region, with 36m-euro deals per month, but lacks a wheat, corn or oil market, despite being amongst Europe's top producers of these commodities. Deals with grain or oil are conducted outside the Romanian Commodities Exchange (RCE), an institution created eighteen years ago to organise these markets. Why?
The new RCE chairman, Radu Popa, now reformulates all the promises of the old RCE management, which, for ten years, had been pledging to create a grain and oil market, but to no avail.
"The target for 2008 is a 1bn-euro deal volume, 150% higher than in 2007. We are focusing on specialised trading pits, mainly on energy products and we also want to develop the grain trading pit," says Popa.
Despite its high agricultural potential, Romania does not have a grain exchange. The grain trading pit, set up in 2006, hosted deals no higher than 20m euros, which accounted for only 7% of the overall deals sealed on RCE.
Corn, wheat and sunflower are not traded on RCE, but rather on agricultural websites. What is keeping grain sellers away from a commodities exchange? "We haven't heard of this alternative. We sell our commodities directly from the cultivated land to save on warehousing costs," a seller of 600 tonnes of grain from the 2008 crop told ZF. Businessman Sorin Stoica of Cluj states he has two million tonnes of wheat besides other commodities. "(...) I haven't resorted to the RCE as there are many websites where I can find buyers. I'm not thoroughly acquainted with RCE procedures, they have not contacted us, yet, but I'm not ruling out a possible collaboration. In setting prices, we look at quotes on the London commodities exchange".
Popa maintains the grain exchange does not have a favourable operating framework, yet. "(...) The state has to get involved by providing the
