Cargill to Stop Elevating Exports of Russian Grain

By Harry Siemens

Mike Lee of Green Square

Agro Consulting and Black

Sea Crop Forecasts gives independent analysis and agribusiness news from Ukraine, Russia, Moldova, Romania, Kazakhstan and Belarus. He reports that Cargill has told Russia’s Agriculture Ministry that it will stop exporting Russian grain from the start of the following marketing year July 1, 2023.

Lee based in England said Cargill later clarified they would stop elevating Russian grain for export in July 2023 but intend to continue shipping grain from Russia to destination markets.

Rumours had circulated that leading grain multinationals were asked to leave Russia.

Back in December, Russian fertilizer producer Uralchem said they would be interested in buying the Russian assets of Cargill and Vitterra if they decide to leave Russia.

At the time, spokespersons for Cargill and Viterra’s Russian operations said their companies did not plan to leave the country.

Lee said the head of Russia’s Union of Grain Exporters, Eduard Zernin, said on his Telegram channel that he believed Cargill had decided to revise its portfolio of Russian assets and eliminate po- tentially problematic ones, the grain business which had become excessively politicized and risky.

“Whether Cargill’s decision is the start of an exodus or just one company’s decision to adjust its business model waits,” said Lee.

As of March 24, Ukraine farmers had sown 168Kha of spring barley, 76Kha of spring wheat, 35Kha for peas, and 114Khea of oats.

Black Sea Crop Forecasts said the Ministry of Agrarian Policy forecasts farmers would sow 1.0Mha of spring barley this year, which would be slightly ahead of last year. Early indications show the planting pace could be on target to finish around the million hectares.

“We will continue to monitor progress,” said Lee.

The Ministry is forecasting 4.8MMT of barley from 1.5Mha (0.5Mha winter barley, 1.0Mha spring barley) at a yield of 3.04MT/HA.

“Our current Ukraine forecast is 5.0MMT,” said Lee.

The Black Sea grain initiative deal appears to be holding, albeit with some confusion about how long it will run. Ukraine said it’s extended for 120 days, and Russia said 60 days, with both sides playing the “grain for Africa” card.

“Ukraine keeps telling the world how much grain is going to impoverished countries ever since Russia started complaining about Ukraine,” he said. “The West, in general, wasn’t fulfilling its part of the deal by sending grain to Africa.”

Meanwhile, Russia reported Putin had a telephone conversation with Turkish president Erdogan, during which they said Erdogan positively assessed Russia’s agreement to extend for 60 days the Istanbul agreement.

“The detail might be lost in translation, but the inference was Erdogan had agreed or at least acknowledged the deal was 60 days without Erdogan saying the deal was for 60 days,” said Lee. “Expect the waters to get much muddier as the days count off.”

Another media outlet reported that Russia’s increased control of its wheat exports threatens to obscure prices and curb efficiency in the global grains market, according to Cargill Inc.’s head trader.

Russia’s grip on its wheat is tightening after three of the biggest global traders, Cargill, Viterra and Louis Dreyfus Co. said they would stop buying grain for export, leaving Russian grain supplies largely in the hands of domestic and government-funded companies noted Lee.