Departure of Western grain traders will benefit Russia – analyst

The exit of Western grain traders from the Russian market will do it no harm. Russian grain will continue to flow into world markets, and Moscow will even have more influence on “where – and at what price – its grain goes,” Bloomberg writes.

Ilya Naimushin / RIA Novosti

Foreign grain traders were major buyers of Russian agricultural products. Viterra (formerly Glencore Agriculture) was the fourth largest trader by the amount of grain the company purchased from Russia – 2.96 mio metric tons in 2022. Cargill was sixth, with 1.35 mio tons. In total, the Russian Federation exported more than 34 mio tons of grain last year, Artyom Deyev, head of analytics at AMarkets, told Invest Foresight.

However, given that those are American companies, Russia will actually benefit from their departure, the expert explained.

“Those traders had access to sensitive information on how much grain Russia produced. Grain is a strategically important product. In 2021, the Foreign Agricultural Service of the US Department of Agriculture had an office in Moscow, which collected information on crops in our country. Now the office is closed, and once international grain traders withdraw, unfriendly countries (primarily the United States) will have less opportunity to obtain sensitive data reflecting the state of Russia’s agriculture and food industry, specifically, grain harvests,” he added.

Furthermore, those companies hold large stakes in various grain-exporting facilities such as port terminals, silos and other infrastructure in Russia, the analyst continued. Leaving Russia, they will sell the assets to Russian companies, which will manage them from then on.

“In any case, these events are unlikely to have any serious consequences for Russia’s grain exports. The international demand for Russian grain is very high; Russia is a global leader in grain cultivation, and production is growing. This provides increasing opportunities for wider import substitution in agriculture, and the departure of international traders from our market will, if anything, promote this trend,” Artyom Deyev concluded.

Previous ArticleNext Article