The importance of risk management in grain trade

She listed risk management as one of the challenges in the field of trade and said: The first risk is the issue of financing in trade. Funding must be done within a certain period of time, that is, from the time of ordering to the time of unloading and supply.

The importance of risk management in grain trade from northern and southern countries of Iran

She listed risk management as one of the challenges in the field of trade and said: The first risk is the issue of financing in trade. Funding must be done within a certain period of time, that is, from the time of ordering to the time of unloading and supply. For example, in the business area of the north of the country (Russia), this period can last 30 to 45 days; because it depends on various conditions, such as the limit of ordering ceilings by the Ministry of Agricultural Jihad, the seasonal limit in Russia in terms of product availability, and the shipping limit in terms of frost and cold. As a result, in addition to the problem of financing, there are seasonal restrictions in the business of the north of the country, but in the business of the south of the country, this restriction is less visible. While in Brazil we are also facing the limitations of planting and harvesting season and there is almost no harvest from February to August and the main harvest season of Brazil starts from September, but financing constraints are constant in the businesses of both Brazil and Russia, and seasonal restrictions have affected most of Russia’s business.

The CEO of Zarin Ghaleh Group noted: In the trade of the south of the country (Brazil), the main supplier companies or the majors are the parties to our account in trade. Therefore, financing must be done through the banking system or through accounts that have an OFAC license, approved by the majors, and this is one of the limitations of the business area in the south of the country. Meanwhile, this restriction does not exist in the business area of the north of the country (Russia), because they are somehow ready to receive funds, but not necessarily through Mir Business Bank, which is one of the branches of Bank Melli Iran in Russia. On the other hand, whether the main sellers are willing to accept Mir Business Bank, LC or not, creates a limitation. Most of the main grain suppliers from Russia also accept other currencies, in the sense that they prioritize the Dubai dirham and accept the Turkish Lira, the Euro, and sometimes Russia’s own ruble.