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Grain Corridor: how to prevent losses

20/ 09/ 2023
  For a long time, the conflict regarding termination of contracts with farmers by international traders due to closure of the Grain Corridor and the impossibility to export grain from TIS terminal has not subsided on the grain market. Problems of traders: impossibility of goods removal by sea from the Pivdennyi Sea Port; storage costs related; risks of spoilage and loss of grain. Problems of farmers: grain price has decreased and farmers have to resell the same grain cheaper than stipulated by the original contract; terminal is not fit for long-term storage, which results in grain spoilage and market decrease of grain price, as well as price reduction due to quality deterioration; grain resale is related to additional costs for handling and logistics, to be borne also by farmers; terminal means farmers trying to return their grain. But the terminal cannot do this, because it has no contractual relations with farmers, but only with traders. It causes both vehicle idle stay (even for two weeks!) and storage fee accrual. In a nutshell, the current situation is unprofitable to any party, since it causes huge losses. Interlegal analysis shows that the international trader’s actions are legal not in every case. Therefore, farmers have an opportunity to demand reimbursement of the losses incurred. Interlegal law team, namely lawyer Mykyta Kocherba, managed by associated partner Karyna Gorovaya, has provided legal support upon the case regarding reimbursement of the losses incurred and is closely monitoring scenario in order to provide to the Client proper legal assistance in due time, as usual. If you have faced similar situation, Interlegal is ready to provide the following legal assistance: to provide recommendations upon loss mitigation and further actions; to consult upon lawfulness of terminating the contract; to help in receiving grain from the terminal; to recover the losses incurred.

For a long time, the conflict regarding termination of contracts with farmers by international traders due to closure of the Grain Corridor and the impossibility to export grain from TIS terminal has not subsided on the grain market.

Problems of traders:

  1. impossibility of goods removal by sea from the Pivdennyi Sea Port;
  2. storage costs related;
  3. risks of spoilage and loss of grain.

Problems of farmers:

  1. grain price has decreased and farmers have to resell the same grain cheaper than stipulated by the original contract;
  2. terminal is not fit for long-term storage, which results in grain spoilage and market decrease of grain price, as well as price reduction due to quality deterioration;
  3. grain resale is related to additional costs for handling and logistics, to be borne also by farmers;
  4. terminal means farmers trying to return their grain. But the terminal cannot do this, because it has no contractual relations with farmers, but only with traders. It causes both vehicle idle stay (even for two weeks!) and storage fee accrual.

In a nutshell, the current situation is unprofitable to any party, since it causes huge losses.

Interlegal analysis shows that the international trader’s actions are legal not in every case. Therefore, farmers have an opportunity to demand reimbursement of the losses incurred.

Interlegal law team, namely lawyer Mykyta Kocherba, managed by associated partner Karyna Gorovaya, has provided legal support upon the case regarding reimbursement of the losses incurred and is closely monitoring scenario in order to provide to the Client proper legal assistance in due time, as usual.

If you have faced similar situation, Interlegal is ready to provide the following legal assistance:

  • to provide recommendations upon loss mitigation and further actions;
  • to consult upon lawfulness of terminating the contract;
  • to help in receiving grain from the terminal;
  • to recover the losses incurred.

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