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The new mechanism for distributing grain trucks will deprive trading of flexibility – according to G.R. Agro

14/ 12/ 2021
  At the beginning of December, Ukrzaliznytsia offered grain growers a new mechanism for distributing grain carriers. However, market participants believe that the new conditions are not beneficial for everyone and may deprive trading of flexibility and efficiency. “This story is not very realizable. 50% of shipments on one route are actually obligations to ship even when you do not need it. According to the terms, wagons are provided for one crop, on one route, at one point of shipment and one point of unloading. Probably, agricultural holdings will be able to implement this, but certainly not commercial elevators and elevators of trading companies,” said G.R. Agro. The company noted that no one can predict a trade 5 months in advance, and also in one direction from one point. Trading requires flexibility and agility. In the case of TsTL cars and new conditions from UZ, this option is absent. Also in G.R. Agro said that under such circumstances it is easier and more efficient for them to transport grain by their own vehicles. The need to order wagons in multiples of 5, which also does not correspond to the operational capabilities of the company. “The average volume of shipments from elevators is from 500 to 3000 tons along the route. This corresponds to the number of 7 to 47 CTL wagons. According to the calculations, we can order 5-45 wagons, which obliges us to organize additional shipments of the remaining volume under the contract by road,” the company added. As a reminder, market participants were offered auctions at which the following lots will be exhibited: the total number of grain carriages in one lot - 750 units; compulsory rhythmic loading along one route (50 wagons) in each decade for 5 months (50 grain carriers * 3 decades * 5 months = 750 wagons); Similar lots will be exhibited at 4 cargo landfills - Odessa Railway, Lvov Railway; South-Western Railway and a common landfill - Pridneprovskaya, Donetsk and Yuzhnaya Railway.

At the beginning of December, Ukrzaliznytsia offered grain growers a new mechanism for distributing grain carriers. However, market participants believe that the new conditions are not beneficial for everyone and may deprive trading of flexibility and efficiency.

“This story is not very realizable. 50% of shipments on one route are actually obligations to ship even when you do not need it. According to the terms, wagons are provided for one crop, on one route, at one point of shipment and one point of unloading. Probably, agricultural holdings will be able to implement this, but certainly not commercial elevators and elevators of trading companies,” said G.R. Agro.

The company noted that no one can predict a trade 5 months in advance, and also in one direction from one point. Trading requires flexibility and agility. In the case of TsTL cars and new conditions from UZ, this option is absent.

Also in G.R. Agro said that under such circumstances it is easier and more efficient for them to transport grain by their own vehicles. The need to order wagons in multiples of 5, which also does not correspond to the operational capabilities of the company.

“The average volume of shipments from elevators is from 500 to 3000 tons along the route. This corresponds to the number of 7 to 47 CTL wagons. According to the calculations, we can order 5-45 wagons, which obliges us to organize additional shipments of the remaining volume under the contract by road,” the company added.

As a reminder, market participants were offered auctions at which the following lots will be exhibited:

  • the total number of grain carriages in one lot – 750 units;
  • compulsory rhythmic loading along one route (50 wagons) in each decade for 5 months (50 grain carriers * 3 decades * 5 months = 750 wagons);
  • Similar lots will be exhibited at 4 cargo landfills – Odessa Railway, Lvov Railway; South-Western Railway and a common landfill – Pridneprovskaya, Donetsk and Yuzhnaya Railway.

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