Global agri and food company Bunge has decided to focus its Russian grain trade in its Azov Sea export terminal in southwestern Russia to boost efficiency.
Rising competition in Russia has proven problematic to some grain traders in recent years, while their trading margins had simultaneously shrunk, Reuters wrote on 12 July.
Bunge’s decision highlighted the growing competition amongst the deepwater ports in the Russian Black Sea, which exported to countries like Egypt, while the shallow-water ports of the Azov Sea usually supplied grain towards Turkey.
A grain trader told Reuters that concentrating its operations on a company-owned shallow-water port terminal could give Bunge the advantage of low costs in a “niche business”.
“Bunge is refocusing and consolidating its Russian grain origination activities in Rostov-on-Don, where we have an export terminal, helping us achieve greater efficiencies,” Bunge spokeswoman Susan Burns told the news agency.
Bunge had already closed its offices in Novorossiisk and Yeisk and it was also planning to close its office in Stavropol this autumn, while the office in Voronezh would begin to exclusively manage seed origination.
“Russia will remain an important origin for Bunge and we remain committed to having an asset footprint,” said Burns.
Bunge – Russia’s 14th largest grain exporter in 2016/17 – also owns a sunflower oil plant in Russia and a grain terminal in Ukraine.
It is one of the four large “ABCD” competitors in Russia, together with Archer Daniels Midland, Cargill and Louis Dreyfus.