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Olam Defies Russian Grain-Export Slump as Louis Dreyfus Retreats

02 августа 2013 года

Aug. 2 (Bloomberg) -- Olam International Ltd.'s grain exports from Russia more than doubled as Louis Dreyfus Commodities BV paced declines by other leading traders after drought decimated the country's crop.

Olam shipped 1.31 million metric tons of Russian grains in the year through June, for an 8 percent market share, figures from the Moscow-based Institute for Agricultural Market Studies show. Olam ranked 13th a year earlier with 585,000 tons, according to data from the National Association of Exporters of Agricultural Products. Glencore Xstrata Plc kept its top ranking and Louis Dreyfus slid to fifth from second.

Russia's grain exports slumped 42 percent to 15.6 million tons in the 2012-13 season through June as a drought reduced wheat deliveries by almost half after record-high shipments in the prior period, according to data from Ikar, as the institute is known. Wheat rallied 19 percent in Chicago trading in 2012 as dryness from the U.S. to Russia hurt crops.

"Olam now owns port facilities in Russia, plus the company has become super-active in the international markets," Vladimir Petrichenko, director of Moscow-based consultancy OOO ProZerno, said by phone yesterday. "As for the others, everyone was in the same situation. Volumes dropped dramatically. Ultimately Russian exports were only active for half of the season."

YugRusi, Aston

Glencore's grain exports from Russia dropped 41 percent to 2.39 million tons, keeping its market share at 15 percent, the data show. Russian shippers YugRusi LLC and OAO Aston ranked third and fourth, respectively. Deliveries slid 29 percent for YugRusi and 51 percent at Aston.

While declines by the other exporters were in line with a drop in nationwide shipments, deliveries by Louis Dreyfus plunged 68 percent to 746,000 tons, the data show. The company took "a prudent approach toward exports" last season in view of a wheat harvest near a record low and monitored the country's export potential closely, Jean-Marc Foucher, chief exective officer for Europe and the Black Sea at Louis Dreyfus Commodities, said in an e-mailed comment.

"This does not change the company's commitments toward Russia, where it continues to invest in handling and logistics capacity," Foucher said. "Louis Dreyfus Commodities believes that Russia will continue to increase its production capacity and remain one of the largest world grains exporters."

Least Since 2003

Russian officials made contradictory statements last year as to whether export curbs were considered because of the drought until President Vladimir Putin said in October there was no plan for restrictions. Russia harvested 37.7 million tons of wheat last year, the least since 2003, data from the U.S. Department of Agriculture show.

International companies last season adopted a "generally more conservative strategy in the Russian market," Dmitry Rylko, Ikar's director, said by e-mail. "There was a threat of possible grain-export curbs for most of the season."

Wheat rallied 47 percent in Chicago in 2010, helped by a ban on all grain exports imposed in August of that year by Russia's government. Some importers were unable to fulfill contracts. The ban expired on July 1, 2011, and Russia shipped a record 27 million tons of grain in the 2011-12 season as the national crop rebounded.

Olam's increased share of Russian exports is "a natural progression, rather than an overnight success," K.C. Suresh, global head of grains at the Singapore-based company, said by e-mail. Olam, which has operated in the Russian grain market since 2008, invested in export terminals in the country and remains committed to "consolidating" its presence there, he said. The company bought the Azov grain terminal in the Rostov region in southern Russia last year.

Local units of Glencore, Olam, Louis Dreyfus and Cargill Inc. belong to the exporters' association, as well as Russian traders including Aston. Officials at Glencore, YugRusi and Aston were unavailable to comment.

Source: Bloomberg  |  #grain   |  Comments: 0   Views: 117

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