An interview with Rustam Guliev/
Commodity trader at Russia's Top Grain

Like many other Russian companies, last season was not straightforward for Top Grain. This year, Russia had a record harvest of 4.3 million tons, 200 thousand tons more than the previous record in 2017 but the invasion of Ukraine cast uncertainty over exports as banking and shipping became increasingly complicated. 

Nonetheless, Top Grain managed to increase their export volumes to 700,000 tons, almost 200,000 tons of which were peas.

“We have opened the markets of Great Britain, the USA, the Philippines, Bulgaria and Germany, among others,” explainded Rustam Guliev, a commodity trader at Top Grain. “Our company has always worked with a fairly wide range of products and it is difficult for us to find any new products for export.” Nevertheless, this year the company sold camelina and wheat flour for the first time.

Guliev explained that peas are becoming more and more popular for Russian farmers due to the low cost of fertilizers and the “unpretentiousness” of the crop compared to cereals. “In addition,

In recent years, peas have consistently cost more than wheat, barley and corn, and peas are always harvested before cereals, which allows farmers to sell their crops faster and increase the turnover of funds.

Moreover, there are some new markets for Russian pea exports this year. Top Grain’s geography of supplies is expanding to Italy, Turkey, Bangladesh, Pakistan and the UAE.

Guliev indicated that his company has conflicting statistics on this season’s domestic pea exports but he believes that, in the period from July 2021 to June 2022, Russia exported 1.4 million tons of peas, 65% more than in the 2020-2021 season. “If we talk about the current season, since July 2022 Russia has exported about 350 thousand tons, which is a good start considering the challenges in the market.” 

As for the export issues, Russian shiploads face massive fleet shortages, making exports to European ports difficult. As a result, the mechanism for exporting grain has become extremely complicated and, accordingly, export volumes fell off compared to last year. The sanctions are another contributing factor. “If we talk about transportation by containers, then most container lines left Russia or severely limited their presence, due to the imposed sanctions”, added Rustam.

Guliev also indicated that the cost of transporting goods is still very high, with the war meaning container freight costs are about 50-60% more expensive than last year. This situation was unpredictable for Russian traders who, like the rest of the world, began to see an easing off of rates at the end of 2021 and the beginning of 2022 as a trend towards a smooth return of the container freight market to pre-COVID-19 levels began to be observed.

“Everything will depend on the freight market, market demand and the policy of sanctions against grain of Russian origin. We can use water transport - ship lots and containers -, as well as railways and cars. The latter, however, is not very suitable for peas due to the small supply volumes,” said Guliev.

He indicated some other problems that Russia might face with pea exports to Europe. “Globally, we first see a problem with payments for our grain, because most Russian banks are under sanctions but European banks are avoiding payments even to those Russian banks that are not under sanctions”. He added that there are additional problems with compliance in individual banks, with an increase in processing time for documents and long delays for receiving funds. “To this, we can add the refusal of some ports to accept goods of Russian origin and a shortage of ships able to call at European ports.”

In terms of opportunities, Guliev mentioned that discussions around pea exports from Russia to China are still ongoing and, as far as he knows, the protocol has already been agreed and prepared for signing in the coming months. “At the moment, we are not aware of any deliveries from Russia to China but for us this is a very promising market and I believe that we could compete with Canada and other major suppliers of peas to China”, Rustam said.

In conclusion, Guliev mentioned some of Top Grain's goals for the near future, the most important of which is maintaining leadership in the export of Russian peas. “We plan to cover new markets, including China, which was mentioned above, increase the volume of deliveries, offer new logistics solutions for our counterparties and remain reliable suppliers of all types of pulses.”