THE ONGOING conflict in Ukraine is seeing multinational grain businesses exiting the Russian market, leaving control of the Russian grain market firmly in local hands.
This week Louis Dreyfus announced it would cease grain exports from Russia, following hot on the heels of news last week that Cargill and Viterra would stop elevating grain due to the continuing fallout of the war in Ukraine.
All three will both stop exporting out of Russia as of July 1.
READ MORE: World wheat prices rise on Russian concern
READ MORE: Grain rally on Russian comments
A Louis Dreyfus statement said the company would look to sell its existing Russian business and grain assets.
A Cargill Australia spokesperson said his company had scaled back its business activities in Russia to essential food and feed facilities but would continue shipping grain from Russia to destination markets.
He said Cargill's other essential food and feed activities, including starches and sweeteners, oils and fats, and animal feed are not impacted by these changes.
In spite of the exit of three of the world's largest grain exporters from Russia the industry is not expecting a marked shake up in global grain supply and demand trends.
"The grain will be still moving out of Russia and there will still be markets that want the product," said Episode 3 grains analyst Andrew Whitelaw.
While Cargill and Louis Dreyfus are members of the so-called ABCD group of the world's largest grains businesses (ADM, Bunge, Cargill and Louis Dreyfus) and Viterra is a major player in both its native Canada and Australia the exodus will not constitute a quantum change in grain export patterns in Russia.
According to data presented by Reuters the three companies accounted for just under 25 per cent of wheat exports from Russia from July last year to March.
Other major grain traders such as ADM are not significant accumulators in the Russian market.
Mr Whitelaw said the major impact to the global grain sector may be felt in coming months with increasing market power in Russian hands.
"What we may well see is more of the exports in the hands of local businesses sympathetic to the Russian government," he said.
"When McDonalds closed up in Russia last year it did not mean there were no more hamburgers sold, there was just a switch to locally owned businesses, and it is probably a suitable way of looking at what's happening in grain exports."
Mr Whitelaw said having more local Russian exporters involved could potentially pave the way for Russian authorities to extend more influence on pricing through market distorting export caps or duties.
"It is a possibility we could see more market volatility due to Russian government policy."
Any tightening of grain supplies out of Russia could have a positive impact on grain prices which may provide short term opportunities for Australian growers looking to price grain.
Already, grain has been weaponised as a bargaining tool in the conflict, with major buyers of Russian wheat conspicuous in not speaking up against the war.