A number of agricultural companies have informed the Ukrainian Agri Council of the impossibility of returning grain from “TIS” LLC terminals that was not exported as a result of the port blockade. The situation has not been resolved for several months in a row.

In March 2023, VISKAR AGRO LLC entered into a contract with AGROPROSPERIS TRADING 2 LIMITED for the supply of 2,000 tons of corn grain. The grain was shipped to the terminal of Pivdennyi port by TIS LLC. Part of the grain - 562 tons - has been exported and paid for.  The remaining 1480.75 tons were left at the terminal.

"On July 4, we received a notice from Agroprosperis that the contract could not be fulfilled and was terminated due to the blockade of Pivdennyi port by the Russian Federation. Then we received an offer from Agroprosperis to buy grain in Ukraine, but at a lower price, namely 7,200 UAH/t. The price of the previous unfulfilled contract was more than 7,400 UAH/t. We agreed to a lower price and to cover transshipment and transportation costs. We sent trucks to the terminal to pick up the grain. But the trucks were not allowed to enter the territory. The trucks stood there for about a week. The vehicles of other companies are also queuing up, and the grain is not given to anyone," said Oleksandr Vasheka, lawyer of the agricultural enterprise Viscar Agro LLC.

Last week, the farm managed to get back about 800 tons of grain. However, the grain returned was of inadequate quality: crushed, with impurities of other crops.  In addition, Agroprosperis, on an unclear basis, invoiced the company for grain storage at the terminal for July - USD18,000.

"We have suspicions about the presence of grain at the terminal and other possible illegal actions with the products," added the lawyer.

In February 2023, Ukr Agro Class entered into a corn supply agreement with the Swiss company SIERENTZ&CIESARL. The company delivered 3523.3 tons of corn to the TIS grain terminal for a total amount of USD735,000. In May and July, Ukr Agro Class received a notice of force majeure from SIERENTZ & CIESARL and the inability to fulfill the terms of the contract due to the blockade of Pivdennyi port. The company disagreed that these circumstances were force majeure, as the grain corridor was operating and grain was being exported from February to May. Later, the company nevertheless appealed to SIERENTZ&CIESARL and the TIS terminal with a request to return the grain due to the inability to fulfill the supply contract. Almost three weeks later, the company received a reply that SIERENTZ&CIESARL did not mind the company taking the grain back. However, according to the letter, the TIS terminal did not confirm their permission for such an operation. In this regard, on August 16, SIERENTZ terminated all relations with TIS, emphasizing that they had paid for all the services for storing our grain. We have not received any response from the TIS terminal. The grain remains unreturned.

Perizhka Farm from Kirovograd region signed a deal with the trader Zelena Dolyna Polissya in April for UAH4.5 million. As in previous cases, the farm transported the grain to TIS terminals.

"This is the second time we have worked with these companies. The first contract was paid for almost immediately, so we agreed to continue cooperation. The new batch was shipped in April. We spent a lot of money to transport the grain to Odesa. According to the agreement, we were to be paid the full amount within 5 working days after shipment. Moreover, the agreement stipulates a 0.5% penalty on the amount for each unpaid day. During this time, we received only UAH50,000. This will not help us cover all production costs. The question is how to conduct a new sowing season without this money. We need to buy seeds, plant protection products, fertilizers, pay salaries and repair machinery," said accountant Kateryna Perizhok.

The Ukrainian Agri Council will keep the situation under control with taking back and payment for the grain delivered to the port of Odesa under control. We urge all parties to comply with the terms of the contract, as farmers need working capital to prepare for the fall sowing campaign.