August 22, 2014

Russian's RIF currently second largest grain exporter

As the current second-largest grain exporter of Russia, OOO Trading House RIF has outperformed international rivals like Olam International Ltd and Cargill Inc, with shipments improving by more than eightfold.

Having an 8% share in the country's exports, RIF has shipped 1.95 million tonnes of grain in the season ending June 30, according to data from the National Association of Exporters of Agricultural Products. Glencore Plc (GLEN) was the top exporter with a 13% share, while Olam ranked third, and Cargill at fourth.

RIF's shipments overtook some of Russia's top 20 exporters after its Don River terminal tripled in capacity during 2013, according to Petr Khodykin, who owns RIF and has a controlling stake in the southern Russian port. The country's grain exports rose 62% to 25.4 million tonnes last year, the Agriculture Ministry said on July 7.

In the meantime, Glencore's Russian unit, International Grain Co., shipped 3.17 million tonnes last season, a 33% rise from the previous 12 months. RIF's exports surged from 231,000 tonnes in the 2012-2013 season, when it ranked at fourteen, according to official data.

RIF's progress follows Olam in becoming the top two exporter in Russia. Previously at the 13th position in the 2012-2013 season, RIF bought a terminal in Azov and more than doubled shipments. Olam exported 1.85 million tonnes of grain from Russia last season, or 41% more on-year.

Founded in the southern Russian city of Rostov-on-Don in 2010, RIF exported all its grain through a terminal owned by OOO Promexpedition, which increased capacity to 250,000 tonnes monthly after an upgrade which concluded last August, Khodykin said. The port ships about 2.25 million tonnes a year as it's covered in ice for three months. It was originally planned to ship grains for other exporters, Khodykin added.

With no commitment from trading companies by the start of last season, RIF plans to remain the sole user of the terminal for the current period. Khodykin decides to maximise the facility's loading capacity by increasing RIF's exports.

There are also plans to expand the terminal's capacity to 350,000 tonnes monthly and add as much as 30,000 tonnes of storage, Khodykin said. However, Western-backed sanctions, imposed on Russian banks due to the Ukraine-Russia territorial crisis, may affect the development.

RIF mostly exports to Egypt, Saudi Arabia, Turkey and UAE, with wheat accounting for about 60% of shipments, said Vadim Sarkisov, the company's chief executive officer.

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