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Top Agricultural Companies Remain in Russia Despite Pleas to Leave Over the Ukraine War

Major agri companies such as Cargill Inc., Bayer AG, and Archer Daniels Midland Co. claim humanitarian concerns about food supply for Russian citizens.

Binita Kumari
Bayer AG India
Bayer AG India

Cargill Inc., Bayer AG, and Archer Daniels Midland Co. claim humanitarian concerns about food supply for Russian citizens and others explain their continuing operations in Russia, whereas Western oil companies, fast-food chains, and other industries have backed out or suspended activities there.

However, advocacy groups and workers from certain agricultural enterprises have asked executives of companies still operating in Russia to draw back even more, and Ukrainian President Volodymyr Zelensky called for continued pressure on Western companies to leave Russia last week.

Companies in diverse areas, including medicine and consumer goods, have also cited humanitarian reasons for continuing to operate certain parts of their operations in Russia.

Johnson & Johnson and AmerisourceBergen Corp., for example, have said that they will no longer pursue new business in Russia, while they will continue to distribute some cancer medicines and end clinical trials.

The continuous operations of agricultural companies in Russia may have broader implications for international food supplies.

Russia's war in Ukraine has engulfed two of the world's most important grain-producing nations, upending a region that has become increasingly important in feeding a growing and prosperous global population.

Analysts believe that a drop in Russian exports of food commodities such as wheat, along with the possibility of a lower harvest in Ukraine, might result in catastrophic global food shortages.

"It's causing a lot of anxiety in the upcoming manufacturing cycle," said Bill Biedermann, co-founder of AgMarket.net, a commodity brokerage and agricultural consultancy firm based in Tennessee.

"If it fails, I can only remember a number of situations in recent history when world food supplies have been so critical."

The invasion of Ukraine by Russian President Vladimir Putin has resulted in a 30 percent increase in wheat shipping costs over the previous month.

While sanctions haven't had a direct impact on Russian food exports, and Russian ports are open for business, importers face high insurance coverage costs when booking cargoes from the country, according to Andrey Sizov, general director of SovEcon, a Black Sea grain market research firm.

According to agricultural scientists, the war will most likely have an impact on the global food supply.

According to the UN's Food and Agriculture Organization, up to 13 million people throughout the world may face famine as a result of rising food prices and supply interruptions caused by Russia's invasion of Ukraine. According to economists and agriculture trade officers, the impact will be felt primarily by import-dependent and low-income countries that rely on Russian grain.

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