The Ukrainian government suspended commercial shipping from its ports due to Russian’s military invasion while many privately-owned grain storage and processing facilities in the country also shut down operations to ensure the safety of their employees, World Grain reported.
Before the port shutdown, a shipping vessel chartered by US-based agribusiness giant Cargill was struck by a missile as it was leaving a Black Sea port on Ukraine’s southern border, according to the 25 February report.
A Cargill spokesman was quoted as saying the crew members were safe and accounted for and the vessel remained “seaworthy” following the incident.
Cargill, which owns a majority stake in a deep-sea port near Odessa and has more than 500 employees working in grain and oilseed processing plants in Ukraine, said it had shut down its facilities on 24 February to keep its employees safe.
Other multinational agricultural companies with facilities in Ukraine also chose to suspend operations once the Russian invasion started in the early hours of 24 February, World Grain wrote.
US-based Archer Daniels Midland (ADM) said safety was its top priority. It employs more than 630 people in Ukraine and operates an oilseed crushing plant in Chornomorsk, a grain terminal in the Port of Odessa, five inland terminals, a river silo, and a trading office in Kiev.
“Currently our facilities in Ukraine are not operating, following security protocols and government guidelines,” ADM spokesperson Jackie Anderson said. “ADM will use the full breadth of our global and integrated supply chain to support the needs of our customers around the world as we manage through this difficult situation.”
Two other US-based companies, leading agribusiness Bunge and agricultural co-operative CHS, also suspended operations in Ukraine, the report said.
Bunge, which employs more than 1,000 workers in Ukraine, said it had closed company offices and temporarily suspended operations at processing facilities in two cities in Ukraine, World Grain wrote.
CHS - a farm cooperative and major grain shipper and retailer of seeds and chemicals - said it had been reducing its export activity in the country for the past few weeks. The company employs 46 people in the region but does not own port operations in the country.
Meanwhile, Russia, the world’s largest wheat exporter, had reportedly kept its Black Sea ports open, the report said, although it had closed the Port of Azov on the Azov Sea to all commercial traffic. Most of Russia’s wheat exports go through the Black Sea ports.
Bunge, ADM and Cargill had not suspended business in Russia as of 28 February, according to a Reuters report.
However, Bunge warned in a filing with the US Securities and Exchange Commission that “the continuation of the conflict may trigger a series of additional economic and other sanctions ... Any such sanctions may also result in an adverse effect on our Russian operations.”
Bunge had been scaling back its Russian grain trading activities in recent years, Reuters reported, including the sale of its Rostov grain export terminal last year that had left it with just US$121M in assets in Russia, according to its filing.
Cargill had about 2,500 employees and investments in grain and oilseed processing, animal feed, poultry processing and other businesses in Russia, Reuters wrote.
Taken together, Ukraine and Russia account for around 30% of world wheat exports, nearly 20% of corn exports and around 80% of sunflower oil, with the continued conflict likely to further tighten global supplies.
