The quitting of international agricultural companies from Russia, the world’s largest grain exporter, is likely to increase uncertainties in the global food market, which is still recovering.
While the sanctions have caused sweeping changes in the Russian economy, the agricultural sector, one of the most important industries in the country, stands out as another area of change.
While the pressure on foreign companies operating in the agricultural sector in the country has increased, the Russian Ministry of Agriculture reported last month that Cargill, Viterra and most recently Louis Dreyfus, one of the world’s largest agricultural companies, decided to stop their export activities in the Russian market.
Foreign companies have a share of 40 percent of exports
As of last year, the country’s largest grain exporter was RIF from the Rostov region with an 18 percent share, while Cargill, Viterra and Louis Dreyfus were among the top 10 grain exporters. The total share of foreign companies in Russian grain exports is estimated to be around 40 percent.
The decision by Western companies to leave also raises questions about the future of Russian agriculture and grain exports.
On March 29, the Russian Ministry of Agriculture announced that grain exports would not be affected by companies shutting down their operations on the Russian market and that their assets would continue to be used regardless of who owns them.
Russia’s geopolitical influence will increase
Foreign experts believe that the Russian government will increase its geopolitical influence in the food sector both domestically and globally as Western companies shut down their operations in the Russian agricultural sector.
Russia harvested a total of 153 million tons of grain last year, making it the world’s largest grain exporter with a share of about 19 percent of the global grain market.
The main customers of Russian grain include countries in the Middle East, Africa and Latin America.