News War
Agro giants ban trade with Russia
Major suppliers of seeds, fertilizers and crop protection products, as well as machines, are cutting or threatening to cut their ties with Russia. These include Bayer, Yara and Borealis. Bayer plans to stop supplying products by 2023 if the war does not end, the company said in a press statement.
Despite calls for Bayer to stop all deliveries of seeds and crop protection products, as well as medicines, the company is not doing so. to own say it has a responsibility to feed people and keep them healthy. Depriving Russia and the Russian people of essential goods would cause more casualties.
Bayer to cease non-essential activities
Bayer, meanwhile, is trying to get all inputs for the coming growing season – which has already started cautiously in Ukraine – to their destination in the country. Meanwhile, it stops all non-essential activities in Russia and Belarus. These are conducting advertising campaigns and making new investments.
Bayer does not reduce or stop the supply of agricultural-related products. At least not this season. In the press statement, Bayer said the G7 of agriculture ministers made it clear that market volatility is increasing and food prices are rising. Food security is thus threatened. By supplying products, production is maintained and the world is protected against an unprecedented food crisis.
Thinking about next season
That may be different for next season. Bauer is still thinking about supplying the inputs for 2022-2023. That depends on the path Russia takes when it comes to the war in Ukraine.
Russia has banned the export of fertilizers, among other things, but that does not stop producers in the west from cutting their ties with the country. That has consequences on many levels. Russian billionaire Andrei Melnichenko owned Eurochem, a fertilizer producer that includes a factory in Belgium. Melnichenko bought the company from BASF ten years ago, but it still runs on the company's raw materials. BASF has decided to stop using raw materials after the announced sanctions to deliver, as a result of which the fertilizer factory in Antwerp is now forced to shut down completely. This despite the fact that Melnichenko would have left the company.
No takeover
At the beginning of February, Eurochem did another bod on Austria's Borealis to buy its nitrogen business for €455 million. Given the current restrictions, Borealis is abandoning the acquisition, which was rigged earlier. The Austrians are now looking at other solutions for their nitrogen branch. Eurochem is one of three companies worldwide that produce and supply nitrogen, phosphate and potash fertilizers.
Yara does not trade with Russians
Last Friday, March 11, the Norwegian Yara known no more buying raw materials from Russian companies. This has everything to do with the EU sanctions on companies and goods from the country. Yara no longer buys products from Eurochem, Uralkali, Uralchem and PhosAgro. Yara, like other manufacturers, is hit by an export ban on ammonia from Ukraine. Nitrogen fertilizer can be produced from natural gas or ammonia, or a combination of both. Earlier, Kai Kikkers, CEO of fertilizer distributor Triferto, also pointed out this place† It has signed new contracts for the supply of ammonia with Russian suppliers, but the question is how long this will remain so. The prices for this are sky high.
The production of ammonium and urea Yara has been scaled down to 45% at two factories in France and Italy. Analysts see another danger. If Yara pays top prices for ammonia or gas, this can set a benchmark for the market that cannot be matched by all parties.
John Deere stops deliveries
Deliveries of parts and machines to Russia are also being or have been discontinued. Major manufacturers such as John Deere, CNH Industrial, Agco and Claas all have factories in Russia. John Deere sells no more material in the country and no longer builds tractors at his factory in Orenberg. This also applies to other American manufacturers such as Caterpillar and Trimble. For Deere, the pain is relatively minor. Only 3% of its turnover comes from Russia and Ukraine. The manufacturer also has an office in Kiev, which is now forced to close.
CNH Industrial – which manages the New Holland and Case IH brands – also no longer supplies material to Russia. This applies to complete machines as well as semi-assembled machines and parts. It has two factories in the country that are (financially) supported to support its own employees and also the dealers. In Kiev it has only a sales office. Agco has no factories in Russia. It is unclear what the producer of Massey Ferguson, Fendt and Valtra is doing with the sales and deliveries. Valtra is in any case no longer supplied to Russia and Belarus.
No statement from Claas
The German Claas is very active in Russia and has factories in Krasnodar where combines and tractors are built for Russia, Belarus and Kazakhstan. In addition, French Claas tractors are also heading that way. The production of combine harvesters is currently at a standstill because parts are not sufficiently in stock. The family business has not made any statements about its plans for production and sales in those countries.
Many other manufacturers and suppliers of agricultural machinery and parts have also discontinued sales to Russia. At the beginning of March, Lely also announced that to stop with their activities in Russia and Belarus.
Niels van der Boom
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