1. Commodity News

Wheat Traders Go to Court after MNCs Cancel Contracts

"We had confirmed the contract on May 11 and began loading containers of the railway rake when we received a message asking us not to load because the contract had been cancelled. I have incurred significant losses as a result of loading, unloading, and having to sell that stock at lower prices than I had contracted for "said Tridev Traders owner Manish Agarwal.

Shivam Dwivedi
Wheat
Wheat

Disputes between traders & multinational corporations have now reached the courts. MNCs point to the export ban order and contracts with force majeure clauses, while traders claim they sold wheat to MNCs rather than for exports. Tridev Traders, an Uttar Pradesh-based grains trading firm, has issued a legal notice to KN Agro-Resources, a Mumbai-based listed company that deals with commodities in addition to other interests, regarding the abrupt cancellation of the wheat purchase order. 

Tridev has requested compensation from KN Agro-Resources for losses incurred. 

"We had confirmed the contract on May 11 and began loading containers of the railway rake when we received a message asking us not to load because the contract had been cancelled. I have incurred significant losses as a result of loading, unloading, and having to sell that stock at lower prices than I had contracted for "said Tridev Traders owner Manish Agarwal.

KN Agro-Resources responded via email, saying, "We have not received any legal notice as of yet."

According to Raju Khandelwal, a broker from Madhya Pradesh, almost all MNCs have cancelled their purchase contracts with the traders. "Almost every multinational corporation has cancelled its wheat purchase contracts with traders. Many of these traders are still at Kandla, looking for a way out. Some are considering going to court."

Many brokers and small traders told that they lack the courage to file a lawsuit because it will be an unequal battle.

According to a Gujarat-based wheat exporter who asked not to be identified, "The export ban decision has harmed the long-established good relations between traders and exporters. There is now a strange sense of hostility."

Companies claim that their hands are tied. According to a large trade house that did not want to be identified, "Customs refused to let us load our goods because we were not in the port area. Because there have been numerous instances of backdated Letters of Credit, the government is taking an inordinate amount of time to scrutinize even genuine LCs."

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