Olam has announced that volumes from its Ukraine grain business have ‘dried out’ because of escalating conditions surrounding the region’s ongoing political crisis and that reduced grain trading was a major reason that earnings for the company for the April – June quarter were sluggish, posting a 1.5% increase to Sing$48.5 million. Secondary reasons for the lower grain volumes were the disposal of its stake in its South African grain operations and the sale of 80% of its Australian business to Japan’s Mitsubishi Corp. in June for $68 million. Although the company states that its Ukraine grain business has ‘completely dried out’ over the past four months, its Russian business is an important part of the company and will continue to operate. Other agribusinesses such as Cargill, poultry group MHP, and egg producer AvangardCo have all experienced losses because of the regions socio-political unrest in the region. Olam is also keeping a watchful eye on the Ebola epidemic in West Africa in respect to its West African flour milling operations. Although the current epicenter remains in the three countries of Sierra Leone, Liberia, and Guinea, six people have died of Ebola in Nigeria where Olam has “significant exposure in operations”. In response Olam has imposed measures to protect its staff and products and is holding daily ‘crisis committee’ meetings on the situation.
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