Brazil to host soy and corn OTC market
By Roberto Samora
SAO PAULO, Nov 1 (Reuters) -Brazil could have its BAB over-the-counter (OTC) market for soy and corn in place before the end of the year, the new market's CEO said on Friday.
BAB has been given the green light from Brazil's securities commission, CEO Eric Cardoni told reporters.
Backed by local railway operator Rumo RAIL3.SA, BAB was created to allow hedging by local traders and farmers to better reflect Brazilian market prices, Cardoni said.
Grain prices in Brazil, the world's top soy producer and one of the largest corn farmers, often diverge from those traded in Chicago because of different crop periods and logistics costs.
Cardoni said the OTC market, in which securities trade without a centralized exchange, will trade contracts in Brazilian reais and could achieve trade equivalent to 24 million metric tons of grains by the end of its third year.
The amount would represent almost half of the expected soy output in Brazil's top grain-producing state, Mato Grosso, in 2024/25.
Cardoni added that 15 companies, most of them grain traders, were seeking approval to trade on BAB.
Reporting by Roberto Samora in Sao Paulo
Writing by Andre Romani
Editing by David Goodman
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