CHICAGO:The Cargill Co. state that on Wednesday, it would take a further step back from the Russian market by no longer handling the grain exports leading wheat supplier from russian terminal beginning in July. Although its shipping unit will continue to transport grain from the country’s ports,
The move increased benchmark wheat futures prices from earlier losses as it stoked concerns about global grain supplies disrupted by the 13-month-old war in the breadbasket region of the Black Sea.
Following Moscow’s invasion of Ukraine last year, the majority of international grain traders have halt making new investments in Russia but have continued to export Russian wheat.
In an email statement, the company state that , “As grain export-related challenges continue to mount, Cargill will stop elevating Russian grain for export in July 2023 after the completion of the 2022-2023 season.”
Cargill did not specify whether it was selling its stake in the grain terminal in Novorossiisk, a Black Sea port.
As the news raised concerns about grain flows from the leading wheat exporter, benchmark Chicago Board of Trade May wheat futures reached a one-month high on Wednesday and EU May milling wheat reached a two-week high.
Arlan Suderman, chief commodities economist at StoneX, state that in a market note, “Russian state exporters claim that they’ll be able to keep grain moving out at the same pace, but major speculative funds holding large short positions lack confidence in that currently.”
Earlier, the Russian agriculture ministry state that Cargill informed it that it would cease grain exports beginning next season.
“The volume of domestic grain shipments abroad will not be affected by the cessation of its export activities on the Russian market.” The grain export assets of the company will continue to function regardless of who manages them, according to the agriculture ministry’s statement to Reuters.