Brazil Joins China and Argentina to Challenge the Chicago Board of Trade

The idea is being explored at a five-day seminar in Beijing organized by the Brazilian Mercantile and Futures Exchange and markets based in Rosario, Argentina, and Dalian, China.

"We have signed a memorandum of understanding with the Chinese exchange of Dalian that will serve as a point of reference in our quest for a joint futures market, so we can operate in their markets and they in ours," Rosario futures exchange chief Jorge Weskamp told the press.

After its sessions in Beijing, the seminar will travel to the cities of Dalian, Shenzhen and Shanghai.

Under the current arrangement, world soy prices are set by the Chicago exchange, which, Weskamp said, does not always reflect the necessities of "our market."

He did not venture to predict how long it will take for Argentine, Brazilian and Chinese exchanges to establish a parallel soy market, noting that many interests are involved.

Weskamp also pointed to questions of market access that remain to be resolved with Beijing. "China is opening up," he said, "but it's not totally open."

China currently consumes around 15 million tons of soy annually, a level of demand that is expected to double in the next few years.

Brazil - the world's leading exporter of the product - and Argentina together control more than 60 percent of the market here and are anxious to maintain their dominance.

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