(Bloomberg) -- In the span of just two days, the future of Western grain traders in Russia has been quickly rewritten.
Major grain trader Viterra said Thursday it will stop shipping crops from Russia starting in July and may shed its assets there, confirming an earlier Bloomberg report. Just one day earlier, Cargill Inc. said it would soon stop exporting grain it sources in Russia, although it can continue buying cargoes from other firms at ports.
The back-to-back moves appeared to spook other traders as well, with Archer-Daniels-Midland Co. now reviewing its stake in a sweetener and starch venture there.
While a wave of foreign companies left Russia shortly after the outbreak of the war in Ukraine, most western crop traders have stayed put while touting the importance of their role in keeping grain flowing from the vital Black Sea breadbasket. But even though agricultural products are not under sanction, the war has made trade more complicated and foreign traders have faced some Russian government pressure to leave.
The shift comes a year after Russia’s invasion of Ukraine and will leave the grain trading market more in control of local companies.
Glencore-backed Viterra said it had concluded that its activities in Russia no longer fit the long-term direction of the company and that it was “assessing options to transfer our business and assets in Russia to new owners.” The company has ranked as the fourth-biggest wheat exporter as of February.
State-backed companies have increased their market share in Russian wheat sales in recent years as the government expands its role in the sector. Russia’s agriculture ministry said Viterra’s withdrawal from the market will not affect Russian grain export levels and shipment capacity will continue to operate as usual.
Chicago wheat futures headed for a sixth monthly loss on Friday.
Eduard Zernin, head of the Russian Union of Grain Exporters, said Viterra’s local team in Russia has self-organized and plans to start its own export company. Viterra couldn’t immediately comment.
Read more: Russia Has a New Wheat-Exporting Champion
Bloomberg earlier reported that Viterra has offered to sell half its 50% stake in a major Black Sea grain terminal to Russia’s Demetra Trading, which owns the rest, according to people familiar with the matter.
--With assistance from Isis Almeida and Tarso Veloso.
(Updates with chart on global wheat exports, wheat prices in eighth paragraph.)
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