French company joins global grain merchants' exodus from Russia

Louis Dreyfus Company will stop exporting Russian grain from July 1, the group said on Monday, joining other global merchants in dropping activities in the world's biggest wheat-exporting country.

Most international grain traders have stopped new investment in Russia following Moscow's invasion of Ukraine last year but continued shipping Russian wheat, Reuters reports.

"Louis Dreyfus Company (LDC) will cease grain exports from Russia from July 1, 2023, as grain export challenges continue to increase in the country, and is also assessing options for the transfer to new owners of its existing Russian business and grain assets," LDC said in a statement.

The head of the local unit made a similar announcement in a letter earlier.

Russia's agriculture ministry said in a statement it had received notice from Louis Dreyfus Vostok (East) that it would cease handling Russian grain exports. It said the move would not affect the volume of Russian grain exports.

International trading firms Cargill and Viterra last week announced they would no longer handle Russian grain exports, although Cargill's shipping unit has said it will continue to carry grain from the country's ports and Viterra's local management team aims to form a new trading firm.

Between July 2022 and March 2023, Viterra shipped around 2.4 million tonnes of wheat from Russia, Cargill 1.6 million and Dreyfus 0.8 million, out of total 33.7 million for the period, agricultural consultancy SovEcon estimates.

Products sourced from Russian and Ukraine made up 2 per cent of LDC's group sales last year, versus less than 4 per cent the prior year, the company said when it presented its 2022 results on March 22.

CEO Michael Gelchie told Reuters at the time that LDC had "no plans for any immediate changes" in Russia but reserved the right to adapt "in line with evolving circumstances."

LDC declined to comment further on the reasons behind Monday's announcement.

LDC operates silos in Russia and a river export terminal in the Azov district in the south of the country.

It is also involved in a long-delayed joint-venture project to build a deep-sea export terminal in the Taman peninsula, a project for which it booked a $156 million impairment in its 2022 results.