OMAHA (DTN) -- Commodity giant Cargill has told Russian officials the company will stop exporting grain out of the country starting in July due to "recommendations" from the Russian Ministry of Agriculture, according to reports from Russian media.
The move comes after Reuters reported last September that the head of a state-controlled bank in Russia, VTB, had written Russian President Vladimir Putin with a proposal to ban the purchase of grain and oilseeds by companies associated with "unfriendly states."
The Russian bank also called for a ban on those foreign companies from owning ports and storage facilities. Yet Russia's Agricultural Ministry had indicated Russia would not expel foreign grain traders from its market.
Bloomberg also reported Wednesday that Viterra will also stop trading Russian grain. Viterra has exported 2.1 million metric tons (mmt) of Russian grain this year.
Cargill began shipping grain to Russia in 1964. The company opened its first office in Moscow in 1991. Cargill lists on its website that the company has built up several operations in Russia during the past 32 years, including grain and oilseed trading, oilseed crush facilities, poultry processing, and animal feed production. There is also production of starches and syrup, food and feed ingredient sales, wheat gluten production and specialty food ingredients. Cargill lists facilities in at least nine locations outside of Moscow.
The move is expected to affect about 4% of Russia's grain exports, though Russian officials indicated it would not reduce Russian shipments. Bloomberg reported Cargill had exported 1.4 mmt of grain out of Russia since last July, making Cargill the sixth-largest grain exporter out of the country. The Russian website RBC cited Cargill's quota for Russian grain for the full year was 2.2 mmt.
RBC reported Cargill notified Russia's Agricultural Ministry of its plans in a letter. Cargill LLC wrote in the letter that the company does not plan to export Russian grain "in accordance with the earlier discussion on grain exports and recommendations of the Ministry of Agriculture." The letter added Cargill would continue exports for the current grain marketing year in Russia "in full accordance with the existing quota."
Cargill did not immediately respond to a request for a statement on the situation with Russia. In a posting on the company's website on Feb. 24, the one-year anniversary of the war, Cargill cited, "In response to this devastating war, we scaled back business activities and stopped new investments in Russia, operating only essential food and feed facilities." The company added, "The Black Sea corridor plays a significant role in growing key ingredients for basic staples like bread, cereal and infant formula for people in more than 50 countries. That is why we must continue to operate in the region, never wavering from our focus on feeding the world, growing and moving food so that hunger is not allowed to become a weapon in this war."
See Cargill statement on Ukraine and Russia, Feb. 24, at: https://www.cargill.com/….
Also see "Ukraine Farmers Adjust, But Greater Risks Are Still Ahead" here: https://www.dtnpf.com/….
Chris Clayton can be reached at Chris.Clayton@dtn.com
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