The Russian subsidiary of the American corporation Cargill will stop exporting grain from Russia in the next agricultural year. The company notified Oksana Luth, deputy head of the Ministry of Agriculture of Russia, about its plans.
The company reports in its letter that in the next season (starting from July 1, 2023 and running until June 30, 2024) Cargill LLC is not planning to export grain from Russia in accordance with the earlier discussions on grain export issues and recommendations of the Ministry of Agriculture. At the same time, the company promised that the shipments planned for the current season will be made “in full in accordance with the existing quota“.
In addition, the Russian subsidiary of Cargill reported that it is beginning to review its portfolio of assets related to grain exports. But changes regarding any other activities and assets of Cargill in Russia are not planned or considered.
Leaving the Russian Market?
“Cargill made a decision to close one of its business lines, but not to leave the Russian market,” stresses Eduard Zernin, chairman of the Russian Union of Grain Exporters. According to him, the company has a diversified capital-intensive business in Russia, which includes several processing facilities. In a situation of geopolitical tension, Cargill decided to review its portfolio of Russian assets and get rid of potentially problematic ones, according to the expert: “The grain business has become excessively politicized and risky. This season we have repeatedly encountered situations of discrimination not only against Russian exporters, but also against international companies that trade in Russian grain. I believe, having weighed up the pros and cons, the company decided to minimize the risks and get rid of a potentially toxic business“.
The Ministry of Agriculture believes that the termination of Cargill’s export activities on the Russian market will not affect the volume of domestic grain supplies abroad. The company’s assets related to grain exports will continue to function regardless of whose management they will be under, says a representative of the ministry. The agency assured that they are ready to work with all foreign companies whose activities contribute to the development of the domestic food market of Russia and its export potential, but stressed that the market niches being vacated are promptly occupied by Russian players.
Source: RBC