RUSSIA- Cargill, a leading global player in the agriculture and food industry, has finalized a deal to divest its stake in a Russian grain terminal situated on the Black Sea to Russia’s Delo Group, a prominent transport and logistics entity.
Confirming the sale, Cargill stated, “In line with Cargill’s earlier announcement to stop the export of Russian grain in July 2023, we can confirm we have reached an agreement with Delo to sell our 25% stake in our KSK grain terminal in Novorossiysk.”
According to the grain elevator, the sale is contingent upon approval from the Russian government but will not impact any other ongoing operations of Cargill within the country. Financial specifics of the transaction remain undisclosed at this time.
A representative for Delo said the reviewing of the deal was expected to take no more than a month.
Delo Group commenced grain transshipment activities at the KSK terminal in 2007 and has significantly invested in its development, amounting to over 9 billion rubles (US$93.5 million).
KSK, in a statement made in July, reported handling 7.6 million tonnes of grain during the 2022-23 season, reflecting a substantial 46% increase from the previous season.
Following Russia’s invasion of neighboring Ukraine in February 2022, Cargill, like several other Western companies, curtailed its business activities in Russia, operating only essential food and feed facilities.
The US-based grain handling giant cited mounting challenges to its grain export operations in Russia as global grain supplies were disrupted by the then 13-month-old war in the region, shooting wheat futures prices to multi-week highs.
By then, Cargill had already stopped new investments in the country in response to the Russian invasion of Ukraine.
Prior to these circumstances, Cargill had established a substantial presence in Russia, engaging in grain and oilseeds trading, oilseeds processing, poultry processing, animal feed, and various other food and ingredient-related activities.
Before Cargill’s decision to halt the export of Russian grain in July, the company had held a significant position as one of the largest non-Russian shippers of the country’s wheat.
Russia currently stands as the world’s largest wheat exporter, supplying approximately 17% of the total to global markets.