While the government is working to keep the 190 million ruble ($6 million) budget for the June 6-7 conference in check, the gathering will be vital to encourage cooperation between grain producing and importing countries, especially after the food price crisis in 2007, Zubkov said at a news conference.
Russia will be hosting the forum on the sidelines of the St. Petersburg International Economic Forum just three weeks after Egypt ordered all Russian wheat imports to be confiscated because of health precautions. Zubkov said Thursday that he expected the issue to be resolved soon, characterizing the matter as "a misunderstanding."
Russia will put forward the idea of the Black Sea grain pool at the conference because the creation of a global organization of grain exporters similar to the Organization of the Petroleum Exporting Countries would be "more than a little work" at the moment, Zubkov said. But he said the grain pool would increase the region's competitiveness because of the strong role that Black Sea countries play on the grain market.
"The creation of a single infrastructural platform and a consolidated exchange rate on the market may become the logical steps. As a result, the influence of this region on world grain trade would get stronger," he said.
In reality, a grain organization made up of Russia, Ukraine and Kazakhstan would bear little resemblance to OPEC since the three countries each produce different types of grain, said Alexander Korbut, vice president of the Russian Grain Union. While OPEC is responsible for setting prices and quota, a Black Sea grain organization would simply serve as a means to coordinate infrastructure and safety standards, he said.
"The politics of the grain market is such that each of the countries have their own competitive advantage and have their own niche in the global market," he said.
As a result of growing grain demand in Asia, Russia will focus more on that market and may build a new export terminal to meet demand, Zubkov said.
An important topic for the conference, he said, would be the creation of an international grain reserve to control grain balances and implement policies that encourage further cooperation.
To ensure that developing countries don't witness a repeat of the food price crisis, forum delegates will have to work together to discuss the development of new technology in the fight against world hunger, he said.
Zubkov later conceded, however, that Russia would have to employ some protectionist measures on food products to shelter its population against unemployment during the recession. "Basic measures will be used during the crisis to secure our people's employment," he said.
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