The three global trading corporations Cargill, Viterra and Louis Dreyfus kept their promises and left Russia on July 1. agrarheute.com discusses the implications for the global grain market.

Back in March 2024, company executives notified the Russian Ministry of Agriculture of the suspension of Russian grain exports amid Western sanctions pressure. By the middle of the year, the issue of transferring subsidiaries operating in Russia to new owners had to be resolved. As a result, Viterra’s Russian subsidiary changed its name from Viterra Rus to MZK Export. It will continue to operate in Russia as an independent exporter.

The Ministry has not yet announced the plans of Cargill and Dreyfus.

According to the Russian Grain Union, in the 2022/23 season, Viterra Rus exported a total of 3.7 million tons of grain (fourth place in the ranking of Russian exporters). The Cargill subsidiary exported 2.3 million tons (sixth place). Louis Dreyfus Vostok, a subsidiary of Louis Dreyfus, exported 1.2 million tons (eleventh place).

Thus, the total exports of the three companies in 2022/23 amounted to 7.2 mln tons of grain. This is more than 13% of Russia’s grain exports (about 55 million tons).

Dmytro Rylko, Director General of the Institute of Agrarian Market Research (IKAR), noted that the combined market share of Cargill, Viterra and Louis Dreyfus in the volume of grain shipments through the Black Sea was quite high – 20%.However, the expert does not believe that the companies’ departure from the market will have any significant impact on the supply of Russian grain to international buyers – there are enough people willing to ship grain. Eduard Zernin, Chairman of the Board of the Association of Grain Exporters, emphasized that powerful national players have emerged and have already surpassed foreign market participants in terms of business volume.

What will be affected if these traders leave is the level of competition among grain buyers from producers.

“If state-owned companies take their place, competition in the agricultural sales sector may suffer,” emphasized Mr. Rylko.

He explained that in a number of Russian regions, these three transnational companies would top the list of potential buyers offering favorable terms to farmers.

“It would be wise to retain the management teams of the three departed companies, as they are among the best on the market,” added Rylko.

Source: https://ukragroconsult.com/