This has a national grain – Kommersant

Local branches of global grain traders leaving the Russian Federation are looking for options to continue work. Thus, the Viterra division can be renamed MZK Export, using the brand under which the company operated in 2004-2017. Exports of Russian wheat next season are expected to be close to a record, which should ease the transition period.

Viterra Rus LLC, the Russian division of the global grain trader Viterra, will continue to work under a new name, two market sources told Kommersant. According to one of them, the company will be called MZK Export. As follows from the SPARK database and the Whois service, in May Viterra Rus registered a series of domains with the names MZK-Export, MZK-Trade, MZK-Rus, etc. Viterra Rus Managing Director Nikolai Demyanov did not provide a comment on Wednesday. At the head office of Viterra, “Kommersant” did not answer.

Viterra, along with Cargill and Louis Dreyfus, announced earlier that they would stop grain exports from Russia from the new season, which will begin in July 2023. As Viterra reported, its work in Russia is no longer in line with the long-term direction, and the company is considering various options for transferring local business and assets to new owners.

According to Kommersant’s sources, Viterra’s operating business is planned to be transferred to local management. MZK Export can also retain control over the terminal in Rostov-on-Don with a capacity of up to 1.5 million tons of grain per year and part of the 50% share in the Taman terminal with a capacity of 5.5 million tons of grain per year, the interlocutors say “ b”. Another part of the stake in Taman can be sold to structures associated with Demetra Holding, which owns the remaining 50%, Kommersant sources say. One of Kommersant’s interlocutors indicates that the final scheme for the transfer of the asset has not been determined. Demetra Holding declined to comment.

IGC (International Grain Company) is the first name under which the current Viterra Rus started grain trading in Russia in 2004 as a subsidiary of Glencore. In 2017, the Russian division was renamed Glencore Agriculcher MZK, and in 2021, after changing the global name of Glencore Agriculture to Viterra, it began to work under the current name.

According to the latest data available to Kommersant from market participants, in July 2022-February 2023, Viterra Rus was the fourth exporter of grain from Russia, shipping about 3 million tons, which corresponds to approximately 9% of all grain exports from the country during this period. According to the interlocutor of Kommersant in the market, without the participation of the global office of Viterra, MZK Export will be more difficult to compete. With a decrease in the share in Taman, it is unlikely that it will be possible to transfer the previous volumes through this terminal, the source notes.

Andrey Sizov, director of Sovecon, explains that, as a division of Viterra, the local company was engaged in the supply of grain for the contract, which was concluded by the global office. As an independent player, MZK Export can continue to sell Viterra grain or look for buyers on its own, he says. Vladimir Petrichenko, General Director of Prozerno, notes that in the grain trading market, a lot is built on trust, which the team must maintain even when changing its name. But the process of isolation may be accompanied by a transitional period, he adds.

According to Mr. Sizov, in the new season, with a decrease in the share in Taman, MZK Export may drop out of the top five largest grain exporters, but will most likely retain its place in the top ten. Next season should be good overall, and Russian wheat exports could top the current season’s record, he adds.

In early May, Sovecon estimated grain exports from Russia this season at 55.5 million tons, including 44.4 million tons of wheat. The forecast for the export of wheat for the next season is 43 million tons. As analysts noted, despite the expected reduction in the wheat harvest in 2023 to 86.8 million tons from 104.2 million tons a year earlier, the overall supply will decrease slightly. As of April 1, the total stocks of wheat in the Russian Federation reached 27.65 million tons, which is 79% higher than the average value for five years, Sovecon calculated based on Rosstat data.

Anatoly Kostyrev