Putin kicks out last western grain trader from Russia: big changes ahead for market - Bloomberg

The largest Western grain suppliers are leaving the Russian market. The last of them was Louis Dreyfus (LDC), which has been operating in Russia since the 19th century. This means that from July 1, the Russian grain market will be left without Western participants. And traders from Russia are likely to be expelled by the Kremlin's decision.

The fact is that in the near future, local grain oligarchs may take over the export niche, writes Bloomberg commodities columnist Javier Blas. In addition, according to the business, China has become more active, which could lead to market turmoil in the entire region.

The Russian division of LDC Louis Dreyfus East sent a letter of resignation to the deputy head of the Russian Ministry of Agriculture Oksana Lut. Earlier, Cargill and Viterra made a similar decision, and Archer-Daniels-Midland (ADM) has been thinking about leaving Russia since July.

LDC said the decision to leave was due to "export difficulties". The company assured that it is already exploring options for transferring its Russian business (including the grain terminal) to "new owners". It did not specify who these owners might be.

As Blas explained, Russia's grain market (unlike the oil market) will not be directly affected by the departure of Western traders. Moreover, according to the journalist, it was the Kremlin that "showed the door" to these companies, probably on the orders of President Vladimir Putin.

The new owners of the assets will be, in particular, "grain oligarchs who are happy to use the war to strengthen their control over the farming sector," Blas said. The losers in this case will be small Russian farmers, who will have even fewer opportunities to sell their crops.

In addition, China has become more active in the grain market. "High-level farmers are saying that. China is now buying up all used American agricultural machinery in America. All that it can buy. It is planning to go somewhere else. In my opinion, Kazakhstan. At the same time, all major agricultural traders have left Russia. Something serious is happening," said Ukrainian businessman Anatoliy Potapenko.

As reported by OBOZREVATEL, Russia is also speculating on the topic of exporting its own products in the issue of extending the grain deal. In particular, the Russian government has threatened to terminate the agreement if five conditions are not met.

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