USAID/Pragma have successfully rescued a complicated trade deal between Jibek-Joly, a Kyrgyz producer of fruit puree, and Kalufruct, the Bulgarian based buyer. Despite the near collapse of negotiations at various stages, USAID/Pragma successfully mediated and held the two sides together to secure a $40,000 order for 269 tons of plum puree from Jibek-Joly, with a letter of intent now signed for a further order worth $500,000.

In October 2002, Valeriy Savov, from Muzimpex, a Tashkent based fruit and vegetables producer, approached USAID/Pragma to help him find a Kyrgyz company called Jalal Abad Jangagy, who he understood had large stocks of plum puree available. He was interested in purchasing the puree on behalf of Kalufract, a Bulgarian company.

After an investigation by Edil Konurbaev, USAID/Pragma Trade Advisor in Osh, it was discovered that Jalal Abad Jangagy was in fact unable to supply the puree. However, USAID/Pragma found another Kyrgyz supplier, Jibek Joly, who did have sufficient stocks.

Jibek Joly and Kalufruct entered into negotiations, but these broke down over disagreements in brix content, price and shipping arrangements. Meanwhile, representatives from Jalal Abad Jangagy who were still interested in pushing forward a deal so they could collect a commission, illegally concluded a deal with Kalufract by misleading them into believing that they were in fact the owners of Jibek Joly.

Although the contract was later voided, as Kalufruct withdrew their money from the signed Letter of Credit after the expiration dates, this episode dented Kalufract’s confidence in dealing with a Central Asian supplier. They decided they would only pursue the deal if they could negotiate through USAID/Pragma’s Trade Advisor. Thus, Edil Konurbaev acted as an intermediary between Kalufract and Jibek-Joly, overcoming several barriers to agreeing the terms of the contract, developing Jibek-Joly’s understanding of international trade contracts, as well as re-building Kalufract’s confidence in the Central Asian market. Finally the deal for 269 tons of plum puree was signed four months after initial inquiries, the product shipped to Bulgaria and the payment transferred to Jibek-Joly.

This represents a considerable success for USAID/Pragma; after the initial deal had gone sour, they were able to intervene and rebuild the buyers confidence in the market, and successfully mediate between the two sides to not only agree a single deal, but also to facilitate the signing of a letter of intent for a further order in summer 2003 for 1,500 tons of apricot and plum puree.

The exercise also proved an invaluable learning experience for Jibek-Joly’s management, who has significantly enhanced their ability to conduct international trade, through USAID/Pragma’s expertise and advice. Indeed, USAID/Pragma and AED project have recently made arrangements for The Chief Technologist from Jibek-Joly to visit Germany on a study tour to gain knowledge from industry counterparts.