Cargill and Viterra are exiting Russian grain export market

The two biggest western shippers of Russian grain, Cargill Inc. and Viterra, are exiting the export market in a shift that will give local firms more control over shipments.

Glencore-backed Viterra is planning to exit the Russian export market and intends to announce the decision soon, according to people familiar with the matter. Cargill will stop exporting grain sourced by the company in Russia from July, but will continue to buy cargoes from other companies.

Viterra and Cargill both ranked in the top six exporters of Russian wheat in the first half of the season. Russian grain is vital to global crop trade and feeding the world. Its agricultural products aren’t under sanction, but trade can be complicated by restrictions on Russian banks and state companies. International grain traders have also faced pressure to leave from Moscow and the local industry.

Wheat futures rose as much as 3.5% in Chicago on Wednesday.

Viterra plans to announce its decision soon, according to the people. For now it’s still shipping grain and is figuring out how it will leave and what to do with its assets.

Cargill cited mounting grain export-related challenges for its decision. However, it intends to keep shipping crops from the country to destination markets “in line with our purpose to nourish the world,” the company said in a statement.

Earlier, Russia’s agriculture ministry said it received a notification from Cargill about plans to stop exporting the country’s grain, following a report by business newspaper RBC. The ministry indicated that it doesn’t expect the move to stop any Russian supplies reaching global markets and that Cargill’s assets related to shipping grain will keep functioning regardless of who manages them.

Governors of key grain-producing regions last year called for foreign companies’ participation to be limited.  Around that time, major Russian fertilizer supplier UralChem informed President Vladimir Putin that it was willing to buy the local assets of grain traders Cargill and Viterra.