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03 Apr 2023 | 17:03 UTC
By Sampad Nandy
Highlights
LDC assessing ways to sell existing assets, business in Russia
LDC to continue operations in Russia until process complete
Major agricultural trading firm Louis Dreyfus Company will stop exporting Russian grain after the 2022-23 marketing year that ends in June, citing "export-related challenges," the company said April 3.
It also added that it is assessing options to sell its existing assets and businesses 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," according to a company statement.
This news follows other major international exporters Cargill, Viterra and ADM stepping back from the Russian market the previous week. The hasty departures have cast doubt on the Russian grain market's prospects for the marketing year 2023–24, sources said.
The company owns a terminal on the Azov Sea, with an annual export capacity of 1.1 million mt, as well as inland storage facilities with a capacity of 1.1 million mt. When Russia invaded Ukraine last year, the company suspended Russian operations in March 2022.
Between July 2022-March 2023, LDC, Cargill, and Viterra shipped 14% of Russia's wheat.
In a statement, the Russian agriculture ministry said it had received notice from Louis Dreyfus Vostok ("East") that it would cease handling Russian grain exports.
"The market exit of LDC, as well as other foreign grain traders, will not affect the volume and dynamics of domestic food exports," the ministry said in a statement April 3.
Consequent withdrawal of multi-national agriculture trading firms cast a shadow over Russia's grain exports in MY 2023-24.
Russia is the world's largest wheat exporter. S&P Global Commodity Insights analysts have pegged Russia's wheat exports in MY 2023-24 at 40 million mt, against 44 million mt seen for MY 2022-23.
For MY 2023-24, Russia is likely to harvest 84 million mt, against 92 million mt seen in the current marketing year.
Platts, part of S&P Global, assessed 12.5% protein Russian wheat at $276/mt FOB April 3, unchanged on the day.
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