February 23, 2016

Sales of Cargill crop inputs in Black Sea region to cease by end-May

Seeds, fertilisers and crop chemicals marketed by Cargill Inc. will no longer be sold in its Black Sea market as the corporation downsized operations due to declining prices for commodities, Reuters reported.

Countries that would be impacted include Russia, Ukraine, Romania and Hungary. By the end of May, Cargill would end its operations in those regions. About 180 employees are expected to be affected by the development.

The key problem was the company's failure to "realise many of the expected synergies" between selling crop inputs and buying grain, according to a press statement. On the other hand, this shortcoming would prompt Cargill to raise the volume of grain acquisitions in the region.

The Black Sea is a major producer and exporter of crops including corn and wheat.

"The company will refocus its attention on its grain and oilseeds origination, merchandising and trading activities in these markets," the statement added.

Cargill's restructuring came as last year's oversupply of grains and oilseeds led to a significant fall in crop prices, and farmers, as a result, reviewed expenses, including those spent on fertilisers, seeds and chemicals.

Sales of Cargill's crop inputs will continue in other countries, including the US and Canada, where Cargill AgHorizons operates a network of facilities that buy grain from farmers and sell inputs.

- Reuters