Dealing with uncertainty in agribusiness

Introduction: Beso Togonidze, with a background in grain trading since 2006 and experience in various facets of the agricultural sector, expresses gratitude for the opportunity to share his insights and acknowledges the expertise of the audience.

Journey in the Agricultural Sector:

• Started as a grain trader in 2006, working closely with Romanian companies.
• Established a compound feed milk company, gaining insights into the producer’s perspective.
• Currently involved in railway logistics within the Pezepe group of companies, which includes silo ownership, freight forwarding, and supporting Ukrainian farmers in export operations.

Challenges and Uncertainties:

• The war brought about significant internal movement of goods within Ukraine to protect them from potential damage.
• The emergence of the Danube corridor as a vital export route, with ports like Izmail and Kilia playing crucial roles.
• Logistical challenges, especially with railways, became a primary concern. The difference in railway operations between Ukraine and Eastern Europe posed significant obstacles.
• The cost of logistics surged, impacting the prices farmers received for their produce.

Market Dynamics and Predictions:

• Beso highlights the potential deflationary trend in global markets, with prices on deep water expected to decrease.
• The challenge lies in balancing high logistical costs with decreasing global prices, especially when farmers have already incurred high planting costs due to inflation and other factors.
• The future of the agricultural sector depends on supporting farmers and ensuring they can continue production despite these challenges.

Conclusion: The agricultural sector’s success hinges on collaboration, understanding, and a united approach. Beso emphasizes the importance of viewing the industry as a team, from farmers to traders to multinational corporations. By working together and understanding each other’s challenges, the sector can navigate uncertainties and ensure its continued growth and sustainability.