Russian grain encountered “RIF”

But this is in theory. In practice, things are different for exporters. Here is the history of TD RIF LLC, one of the largest grain trading companies in Russia.

In the period from March 18 to 21 of this year, simultaneously, in the batches of agricultural products already formed for export (at that time 26 ships were loaded), the Federal State Budgetary Institution “TsOKZ” (Grain Quality Assessment Center) and the RRC (a division of Rosselkhoznadzor) began to identify quarantine objects. It is clear that such grain cannot be sent abroad.

Let’s look at the chronology of events.

Port of Novorossiysk: On March 13 and 16, 2024, grain was shipped to Egypt, and the next day to Yemen. However, on March 19, as cut off: quarantine objects were found in grain;

Port Kavkaz: On March 14, the grain is safely sent to Egypt. And starting from the 19th, in the same batch… quarantine facilities were again identified and all the cargo remained at the pier;

Go ahead. Port of Azov: Until March 18, agricultural products were shipped to Morocco, Turkey, and Bangladesh. And the very next day the ships were laid up for the same reason – quarantine facilities were discovered again.

Noteworthy is the fact that the grain shipped since March 18 has been accumulated and stored at terminals (deep-water ports) since the end of 2023, this is the 2023 harvest.

It is impersonally shipped from the same containers, both for TD RIF and for other exporting companies. And in terms of quarantine phytosanitary condition, it cannot differ from the grain that was shipped and exported earlier.

In addition, at the same time, in the same ports from the same terminals and even to the same countries (!), cereals are shipped to other traders without any problems. Everything is fine and great for them. And at RIFA, no matter what they check, they find quarantine objects: smut, rust, powdery mildew and other diseases.

Such a biased attitude towards RIF Trading House LLC is puzzling. Let’s explain why.

Help “MK”. LLC “TD “RIF” has been a leading exporter of agricultural products in the Russian Federation for 14 years. During this time, the company supplied agricultural products to more than 40 countries around the world. The company’s partners include more than 7,000 suppliers of Russian agricultural products. The company cooperates with 30 elevators and 3 deep-water ports in the country. During the period from 01.01 to 17.03.2024, “Trade House “RIF” shipped and sent 2.5 million tons of grain to 17 countries around the world. Deliveries were carried out from 3 deep-water (Novorossiysk, Kavkaz, Tuapse) and 3 river ports. High-quality Russian wheat was also purchased by Bangladesh, Egypt, Yemen, Libya, Israel, Morocco, and Turkey. 184 vessels were used for transportation.

However, starting from March 18, 2024, a series of events has occurred that cannot but cause alarm and concern. Why are supplies from one of the country’s largest trading companies disrupted?

The history of the emergence of OOO TD RIF in 2010 is the history of the development of the country’s market economy. If most large traders were created on the basis of privatized enterprises, that is, on the Soviet legacy, then RIF did not have such an opportunity. It was created from scratch, from scratch, so to speak.

At that time, Russia had only two Black Sea ports through which exports were carried out. And, of course, a terrible monopoly reigned, the third was superfluous.

RIF had to create such working conditions in order to become competitive.

They “invented” offshore cargo transshipment, and it began to successfully compete with monopolists. The company made prices for the purchase of grain from producers open.

Initially, one pier with a length of 170 meters and a storage facility with a capacity of 30 thousand tons were built in the city of Azov, Rostov region. Today the company has a grain terminal in Azov for reception, storage and shipment to water transport. The granary has a capacity of 108 thousand tons, 6 berths with a length of almost 1000 meters with the ability to receive ships with a capacity of 3-5 thousand tons…

At one time, the trading house began with three river-sea class motor ships. The company now owns 17 such vessels. The company initially had 10 hopper cars to transport grain. Today there are 1,570 of them, and the acquisition of another 720 such cars is planned for 2024.

The LLC built a system for accounting and logistics of goods that made it possible to pay agricultural producers 90% of the cost of goods the very next day after the delivery of grain. It is unlikely that any of the traders could afford such a “luxury”, since paperwork and accounting takes from 7 to 10 days.

New markets for products have emerged.

It is not surprising that the country’s Prime Minister Mikhail Mishustin presented a certificate from the President of Russia to the director of the company, Marina Turyanskaya, for her active participation in the preparation and conduct of socially significant events.

One and a half thousand employees work here. TH “RIF” is included in the List of backbone organizations that have a significant impact on the economy, employment and social stability in the Rostov region, and in the List of backbone organizations of the Russian economy.

LLC “TD “RIF” is one of the largest taxpayers. Thus, the company paid taxes in 2023: 16 billion rubles. (including personal income tax and unified social tax – 3.9 billion rubles, profit tax – 11.9 billion rubles, others (land tax, transport tax) – 0.2 billion rubles). The export duty paid amounted to 45.5 billion rubles.

And suddenly such force majeure circumstances occur.

Ships with wheat, which are eagerly awaited in importing countries, have been “sunbathing” at loading ports for many days now. And when? According to various estimates, the transitional grain stock from the last harvest today is about 40 million tons. These volumes must be sold to the foreign market. To free up space for Harvest-24.

The President of the Russian Federation in his Address to the Federal Assembly on February 29, 2024, especially noted: “Russia is the leader in the global wheat market. We are among the top twenty food exporting countries. By 2030, the volume of production of the Russian agro-industrial complex should increase by at least a quarter compared to 2021, and exports should increase by one and a half times.”

“Our activities have been stopped and, in fact, completely blocked,” says Petr Khodykin, owner of TD RIF LLC. – All our ships that are already loaded are denied export documents. The inspectors are not satisfied with the quality of the grain. We have been working in this market for 20 years, everything was fine, no complaints. Last year we sent 400 ships with cargo for export.

And then one day, March 18, suddenly everything became bad. Agree that this does not happen…

– Perhaps the grain can suddenly get sick? Today it is of high quality, but tomorrow, due to long storage, some kind of bunt has appeared in it. Is it possible? It had been lying around since last fall!

– Grain is stored in the intervention fund for both 5 and 10 years. And it does not lose its properties. To preserve the harvest, the main thing is that mice do not eat it and that water does not penetrate there. Dry grain can be stored for many years.

In addition, during loading at the port, representatives of the country to which the cargo is intended are present. For example, the Egyptians in our port carefully check the quality after every two thousand tons. They have no complaints, they signed all the documents, they are satisfied with everything.

Deliveries were made to Israel – also representatives, even with a rabbi and prayers. They also have no comments.

This is a very serious matter, a government contract.

But the foreign representatives left long ago, but their wheat is still in the ports…

– How much cargo has accumulated that you cannot send?

– About 400 thousand tons as of March 22. Everything is loaded onto the ships.

– And what is the future prospect if, as they say, they don’t give the go-ahead? Will the grain be destroyed?

“I can’t say anything here; I’ve never encountered such a situation.” Profile structures must be understood.

We notified the governor of the Rostov region, the regional prosecutor, and the deputy chairman of the Russian government, Victoria Abramchenko, about the current situation… In general, we notified all authorities.

– What did they answer you?

– Nothing yet, the story is just beginning. And it is, in fact, very relevant. After all, grain is not just business and money. This is food, food that is expected in many countries around the world.

– Speaking of money. What economic losses has the company suffered since March 18?

– Preliminarily, “by eye”, more than one million dollars. If we don’t resume work soon, the damage will be enormous. Failure to meet delivery deadlines will result in a fine. Or the customer will refuse the contract altogether, then he will have to sell at a discount, that is, with a discount in price of 20–30 or 50 dollars for each ton.

Another question is who would want to buy a product that has a trail of problems behind it. I want to emphasize, in my opinion, far-fetched, artificial problems.

The losses also include payment to the shipowner for the vessel’s demurrage. This is 20 thousand dollars per day.

– It’s not clear, now from high stands they are only talking about the need to increase the export of agricultural products. And 400 thousand tons of grain stuck in different ports, it seems, did not surprise anyone…

“I believe that perhaps “someone” wants to squeeze out my company. Last October, when four of our ships with cargo were detained, I was directly offered to sell RIF. Now I understand that this was the “first call”. But we will fight to the end.

Our company’s employees have something to lose. TD RIF LLC is the first company registered and accredited to participate in government tenders of foreign countries as a Russian company. Our other market participants enter trading through foreign companies. Today our trading house accounts for 25% of exports.

…The issue of export supplies concerns not only OOO TD RIF. This is a question of Russia’s prestige in the international arena: our country may be seen as an unscrupulous supplier of food to countries around the world. Moreover, RIF generally cooperates closely with states that are friendly to us.