RUSSIA- Louis Dreyfus Company announced that it would cease grain export operations from Russia at the start of the new trading season in July.
This announcement comes within days of Cargill and Viterra announcing that they also would drop export activities in Russia.
“Louis Dreyfus Company (LDC) will cease grain exports from Russia from July 1, 2023, as grain export challenges continue to increase in the country and is also assessing options for the transfer to new owners of its existing Russian business and grain assets,” the Netherlands-based company said.
LDC added that the company will continue to run its operations in Russia until the process is complete as per applicable laws and regulations.
Russia’s agriculture ministry maintains that this announcement, as well as Cargill’s and Viterra’s decisions, would not affect the volume of Russian grain exports, which include about 17% of global wheat exports.
Products sourced from Russia and Ukraine were 2% of LDC’s group sales last year and will be significantly less for this financial year.
LDC employs about 650 people in Russia, focusing on wheat, barley, and corn exports, and exporting 1.5 million to 3 million tonnes of grains annually from Russia.
LDC operates several offices and seven inland silos in Russia that total about 900,000 tonnes of storage and a grain export terminal on the Don River with access to the Sea of Azov, acquired in 2015.
The terminal was inaugurated in May 2017 and has an annual capacity of about 1 million tonnes with 50,000 tonnes of storage in 10 vertical silos.
LDC also operates a riverside elevator in Volgograd that allows grain exports along the Volga River and down to the Caspian Sea.
It is unclear whether LDC will continue Russian operations using a completely different company as the company has not released further information concerning its decision to stop Russian grain exports.
Most international grain traders have stopped new investments in Russia following the country’s invasion of Ukraine on Feb. 24, 2022, and this trend could negatively affect Russia’s global market share.