Exchange indices

Indices are the indicators that are most widely used in economic analysis to characterize the development of the national economy in general and its individual sectors.

The use of appropriate indicators (quotations, indices, and other economic metrics) as objective price benchmarks is widespread in the international practice of execution of wholesale transactions, including long-term transactions, with various types of products, particularly primary commodities.

The indicators related to the key commodity groups, including agricultural products (milk powder, butter, cheese, wheat, corn, rape, sunflower seed, meal of oil seeds, sugar, coffee, cotton, cocoa), metal products (aluminum, copper, zinc, lead, tin, nickel), petroleum products, natural gas, forestry products, and other products are measured by either commodity exchanges or by global information and analysis agencies.

The key factors that lend credibility to the published indicators are the input data used for their measurement, and the openness of their calculation methodology, as very few transactions executed on major world exchanges result in physical delivery of the commodities, with information and analysis agencies publishing them on the basis of market estimates collected from both sellers and buyers rather than on the basis of real contracts.

In connection with that, JSC ‘Belarusian Universal Commodity Exchange’ offers its proprietary exchange price indices built on the basis of transactions executed in the course of exchange auctions and involving the sale of various commodities (real transactions resulting in actual deliveries) using a transparent calculation methodology endorsed by competent government bodies.

Exchange price indices are one of the key analytical tools employed to visualize the trends emerging in the exchange market. Those indicators can be used to conduct retrospective analyses and build forecast models, and serve as benchmarks utilized by government bodies to implement fiscal policies, expand the application of exchange mechanisms to adjust exchange transaction prices, etc.

Unlike in the case of global exchanges and agencies, our calculation of exchange price indices is based on real exchange transactions which are executed in a competitive environment subject to the actual demand and supply balance, and objectively reflect the situation in the market.

Belarusian exchange prices for numerous commodity groups, including metal products, cabling products, round timber, sawn timber, oilmeal, and butter, are representative (meaning that exchange auction sales of those products are regular and sufficient in terms of volume); therefore, they are sought as a reliable source of market information not only in the Republic of Belarus, but also in other countries and regions.

The Methodology for the Calculation of Individual and Composite Exchange Price Indices for Exchange Transactions at JSC ‘Belarusian Universal Commodity Exchange’ establishes the procedure for the calculation of individual and composite exchange price indices for exchange transactions executed at the exchange.

The Methodology was developed with the participation of experts in statistics, economics, pricing, and exchange trading and representatives of the scientific community, endorsed by the main sectoral ministries (including the Ministry of Industry, the Ministry of Agriculture and Food, and the Ministry of Forestry) and the key government bodies (the Ministry of Economy and the National Statistical Committee), and approved by the Ministry of Antimonopoly Regulation and Trade of the Republic of Belarus on December 24, 2024.

The Methodology is built on the following principles and covers the following matters:

• development of a classification of commodities;
• determination of the method of calculation and of the mechanism used to cleanse the data from non-typical values (outliers);
• determination of the weights assigned to individual commodities and commodity groups and used in the calculation of indices, and verification of the relevance of the components of each index;
• verification of regularity of, and determination of the procedure for, the review of composition of indices;
• normalization of data to ensure relevance and comparability of values;
• determination of periodicity and regularity of index updates;
• preservation of historical data;
• determination of the procedure for the publication of data;
• ensuring transparency of the mechanisms employed and their compliance with generally accepted standards to build credibility of data;
• determination of the procedure for the modification of the methodology for the calculation of indices, etc.

Exchange price indices are divided into individual indices and composite indices. Individual indices provide a more accurate reflection of the price situation and dynamics for a specific commodity, while the key advantage of composite indices is their simplicity and clarity when one needs to examine the overall market situation for an entire group of commodities. 

Exchange price indices are expressed in relative values (demonstrating the percentage change relative to the period under comparison), but they can also be used to reflect the average-weighted prices that were used to measure such indices (absolute values). 

Appropriate weights of individual exchange price indices for the relevant commodity groups shall be used to build composite exchange price indices.

Commodity group weights shall remain constant for a period of three years, provided that their structure does not change (calculation of commodity group weights shall be performed on an annual basis prior to the calculation of individual and composite exchange price indices for the month of January of the reporting year, and such commodity group weights shall be updated if the resultant weights deviate from the weights, as set for the aggregate commodity group for the base period, by more than 20 percentage points).

Composite and individual indices are base indices.

The base period of the indices is January 2024 (index values for that period are equal to 100%, or 1). Indices are expressed as percentages, and measured on a monthly basis.

For example, if the January 2025 value of an index is 103%, it means that the price of the relevant aggregate commodity group or commodity group has increased by 3% relative to January 2024.

The average-weighted price (excluding VAT) of the observed commodity group during the reporting month can be published in addition to the individual price index expressed as a percentage. That indicator reflects the average-weighted value of the relevant commodity group determined in accordance with the Methodology on the basis of exchange transactions executed during the reporting period.

Taking into consideration the formula used for the calculation of composite price indices, average-weighted prices for the relevant commodity groups are not published.

Additionally, the published data may include the change in the average-weighted price or index relative to the preceding month (change dynamics) expressed as the rate of increase (for example, +2%, or -1%).

Exchange price indices are published on a monthly basis on or before the tenth business day of the month following the reporting month.

When publishing, demonstrating, or using any information on exchange price indices, the user must refer to JSC ‘Belarusian Universal Commodity Exchange’ as the primary source of the relevant materials.