Everything can be politicized, except food. This holds more relevance amid widespread protest and collective boycott calls against Russia's invasion of Ukraine since Feb. 24.
With hundreds of multinational companies exiting Russia, pressure is mounting on major agricultural trading companies to follow suit.
But is it too much of an ask? Probably.
The Big 4 of world agriculture – also called ABCDs – namely Archer Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus are not expected to leave Russia, at least not in the short-term, analysts told S&P Global Commodity Insights.
Speculations of the Big 4 leaving have been rife in the market since the companies announced "downsizing of operations" in Russia.
Louis Dreyfus was the first of the four entities to halt its business in Russia in early March, before Bunge announced the suspension of any new export business from the country. On March 11, ADM and Cargill released statements signaling scaling back of their businesses in compliance with the EU sanctions.
Infographic: Sanctions on Russian energy and commodities explained
However, some analysts think that linking downsizing of operations with eventual departure from the country is too far-fetched.
"It is almost unthinkable that major agricultural companies will totally exit Russia as that will mean cutting-off the region's prime food supply source," a New York-based analyst said.
To say that Russia's grains supply is vital to satiate world hunger could well be an understatement.
As a transcontinental country spanning Eastern Europe and Northern Asia, Russia is a major global food supplier and world's top exporter of wheat, a stable crop for almost everyone on the planet. It also holds significance in global trade of sunflower oil, corn, barley, poultry meat, beef and chocolate confectionery products.
Commodity analysts see a definite trend: agricultural majors are adopting a prudent stance by weathering the storm and waiting for tensions to diffuse in the Black Sea region
Global agricultural companies have played a big part in Russia's resurgence as one of the world leaders in food supplies.
Through their sizable investments, including crushing plants and grains infrastructure, and extensive supply-chain network in Russia, the ABCDs have been an integral part of Moscow's food supply dominance.
So, the question of leaving all that behind must be tricky for these trading majors.
Soaring prices and profits
Calls for boycotting Moscow comes at a time when commodity prices have soared to rare peaks, generating tremendous profits for the agricultural trading houses.
Skyrocketing demand coupled with drought since 2020 in key producing regions of the world, such as South America and Black Sea, created a perfect storm for commodity prices to spike.
And then, Russia's invasion of Ukraine happened, which only escalated the tight supply-led price rally to an entirely new level.
Russia commands a significant chunk in global agriculture trade flow, especially for wheat and sunflower oil. For both these commodities, Moscow accounts for roughly 20% of global trade.
Ukraine is no slug either. It is one of the leading shippers of wheat, corn and sunflower oil, among others.
The ongoing geopolitical tension between these two leaders of global food trade clearly reflects on the price upsurge.
According to S&P Global, FOB Black Sea wheat (Russia, 12.5%) was assessed at $405.00/mt on April 12, up 68% on the year, while sunflower oil FOB Black Sea Ukraine (May) was estimated at $1869.50/mt, up 24% year on year. S&P Global assessed FOB Black Sea corn (Ukraine) at $334.50/mt, up 28% on the year.
Will they ever leave?
The Big 4 have been coy about their long-term intentions on Russia and have not given any indication of leaving Russia for good.
In fact, they have justified their defiant presence in Russia on humanitarian ground of treating food as an essential commodity, bereft of politics and sanctions.
Despite sustained pressure from international community, Cargill has vehemently clarified that it will continue with its essential food and feed business in Russia.
"Food is a basic human right and should never be used as a weapon," Cargill said in a statement March 11. "This region plays a significant role in our global food system and is a critical source for key ingredients in basic staples like bread, infant formula and cereal."
ADM had also made its intentions clear in persisting with production and transportation of essential food commodities and ingredients in Russia. Bunge, meanwhile, has decided to carry on its crushing business in the country, which almost exclusively serves local consumers.
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Commodity analysts see a definite trend of agricultural majors adopting a prudent stance of weathering the storm and waiting for tensions to diffuse in the region.
"If any international agricultural company has operations, such as crush plants, inside Russia, we see no reason for them to quit," said Terry Reilly, senior commodity analyst with Chicago-based Futures International, an exchange brokerage group. "Once the tension subsides, and rebuilding begins, these global companies will again become vital to the Black Sea trade."
Brian Splitt, technical analyst with St. Joseph, Missouri-based agro consultancy AgMarket.net, mirrored this viewpoint.
"If the ultimate scenario of regime change [either in Russia or Ukraine] does happen, I could see western countries eager to resume full operations in the Black Sea region," Brian said. "It's a very fertile breadbasket and business opportunities are high."