The NSSMC (National Securities and Stock Market Commission) and the State Forestry Agency (State Agency of Forest Resources of Ukraine) today, November 25, signed a memorandum of cooperation. This means that there will now be more transparency and coherence in the timber market, trade mechanisms in the commodity market will be properly regulated, and the state will receive more budget revenues and new hectares of green spaces.
"Currently, the timber market as a commodity market is in its primary stage of operation. But we already have the initial victories - the growth of forest trade and, as a consequence, additional revenue for the state. In addition, we consider commodity markets not in isolation from other markets regulated by us. After all, the spot market will help create new derivative financial instruments and hedge risks. By the way, we are already considering the possibility of launching indices on wood and "carbon bonds", says Ruslan Magomedov, Chairman of the NSSMC. "Therefore, we are happy to partner with the State Forestry Agency, support our initiatives and look forward to joint work to develop the industry."
Hence, for example, according to the results of work from July to November - for the period of trade in timber on licensed exchanges - the state received UAH 1.1 billion of additional revenues from unprocessed timber put up for auction.
The memorandum between the NSSMC and the State Forestry Agency stipulates for the consolidation of efforts of state institutions aimed at creating the preconditions for effective development, the functioning of the timber market, organized commodity markets and capital markets, ensuring transparency of participants in relevant markets. The document provides for mutual consulting assistance, information exchange, joint approaches to mechanisms and tools for quality regulation of the timber market, organized commodity markets and capital markets, etc.
"We are waiting for the adoption of the law on the timber market, which will resolve all issues. Today we can already observe qualitative changes in timber trade on licensed exchange markets. The enterprises of the industry for 10 months of 2021 received revenues of UAH 6.5 billion more than during the same period. We are glad that the regulator of the capital market and commodity markets shares our approach to the protection and sustainable development of forestry in Ukraine," said Yuriy Bolokhovets, Head of the State Forestry Agency of Ukraine.
It should be noted that starting from July 1, 2021, trade in standardized goods (grain, wood, fuel, etc.) was transferred to licensed exchanges. The National Securities and Stock Market Commission, the regulator of capital markets and organized commodity markets in Ukraine, is responsible for their licensing. The State Agency of Forest Resources of Ukraine, as the central executive body, pursues the state policy in the field of forestry and hunting. The development of commodity markets, including the timber market, is one of the points of the Memorandum of Ukraine with the IMF.