This week, the GPC interviewed Rustam Guliev, a commodity trader at Top Grain Ltd, to discuss the company’s growth and trading patterns as well as the impact of the Coronavirus pandemic on business and how Russian exporters have fared with lifting of the export ban into India.
I have worked at the company since September 2016 and since that time we have managed to increase the volume of container exports from practically zero to a revenue of 15 million dollars. This amounts to around 10% of Top Grain’s overall revenue. The company has been in the market since 2005 and last year we marked our 15-year anniversary. We export large numbers of peas and flax from Russia, as well as chickpeas, and have a strong presence amongst other niche crops.
The majority of our peas and chickpeas are sent to Europe – Italy, Spain, the UK and Asia, to places like Pakistan, India and Bangladesh, but also to the Middle East, to Turkey, Jordan, Saudi Arabia, the UAE, Egypt and others. Recently we have shipped our first Panamax vessel with yellow peas to Bangladesh.
Of course, like other exporters, we encountered several problems. To give an example, it became a lot more expensive to send freight on containers to the countries in Asia, in particular to Pakistan and India. It is largely for this reason that exports to these countries in the last few months have stopped almost entirely. This forced us to identify new target markets; something that we have done successfully. It was the first time that we had sent such a large quantity of peas to Bangladesh – 30,000 tons on one ship.
Before Covid we could say that around 85% of our container exports of peas and chickpeas were to Pakistan and India. However, with the arrival of Coronavirus, we are now seeing a global crisis regarding container ships and the cost of freight has increased. The cost has roughly doubled. For example, if it had cost $55-60 per ton from Novorossiysk to Karachi, it now costs around $100-110 – it has become twice as expensive.
So, as it has turned out, we have been sending effectively nothing to India and Pakistan for the last six months. At the present moment, with the cost of shipping freight more expensive, the effects of the coronavirus pandemic and the overall crisis with containers, our biggest markets for chickpeas are Turkey, England and the Middle East - namely Jordan and Saudi Arabia. This was actually the first season that we had sent chickpeas to England.
Indeed, the ban on the import of Russian lentils to India was lifted at the start of September but, unfortunately, it did not lead to a sharp rise in demand in the region. I think that this was because of high prices as the cost of red lentils reached $900 CPT Novorossiysk, while green lentils cost $1,150 CPT Novorossiysk. I would suggest that Indian importers were not entirely prepared to accept such a business situation and remain so. It is possible that they are waiting for prices to fall in order to cover their demands.
As a company, Top Grain is, of course, striving to develop new markets and attract new partners. We remain demanding of ourselves in terms of fulfilling our obligations and we try to provide each customer with the very best service. We believe that the reputation of Russian exporters has noticeably changed for the better in recent years. From our side, we are putting in the maximum effort to ensure that our partners are satisfied with the quality, service and, of course, price of our product.
Yes, if we take Ukrainian exporters of peas then, certainly, we see them as our competitors and we always compare our prices with theirs. In terms of pulses in Ukraine and the Baltic states, the quantity of production is much less. Of course, they are our competitors but, without wanting to cause offence to anybody, Russia produces pulses on a much larger scale.
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