Zinger Key Points
- Russia's agricultural sector gets a lifeline as part of a temporary and limited ceasefire deal.
- Russian billionaires previously gave up control of their agriculture businesses as part of sanction requirements.
- Markets are swinging wildly, but for Matt Maley, it's just another opportunity to trade. His clear, simple trade alerts have helped members lock in gains as high as 100% and 450%. Now, you can get his next trade signal—completely free.
The United States has agreed to restore Russia's access to the world market for agricultural and fertilizer exports in the latest push for a full ceasefire agreement between Ukraine and Russia.
The news is dragging down several fertilizer stocks and could see Russian oligarchs who faced previous sanctions fighting back for control of their companies.
What Happened: After Russia invaded Ukraine, sanctions were placed on Russian businesses and oligarchs, while the country shut down American-owned businesses like restaurants owned by McDonald's.
As part of the latest agreement, the U.S. and Russia have agreed to safe navigation and eliminating the use of force for commercial vessels in the Black Sea.
"The United States will help restore Russia's access to the world market for agricultural and fertilizer exports, lower maritime insurance costs, and enhance access to ports and payment systems for such transactions," a White House press briefing said.
Agricultural stocks like Intrepid Potash IPI, The Mosaic Company MOS and Nutrien Ltd NTR fell on the news Tuesday.
The agreement could see Russian agricultural companies and financial institutions involved in trade lifted from sanctions and rivals once again with other global agricultural companies.
Why It's Important: Russia was one of the largest agricultural explorers before receiving sanctions after invading Ukraine and seeing its shipping routes under pressure to export to other countries.
Several Russian billionaires also received sanctions and, in some cases, stepped down from leadership roles and handed over stakes in their businesses to trusts or other parties.
With the latest news, time will tell if those Russian billionaires, who were mostly accused of being oligarchs and having close ties to Russian President Vladimir Putin, will be able to profit from the agriculture trade once again.
Andrey Melnichenko is the founder of EuroChem and listed as the 62nd richest person in the world by Bloomberg. Melnichenko previously withdrew from the board of directors of EuroChem and Suek, a large coal company in the country. EuroChem is now controlled by a trust, which includes Melnichenko's wife.
Dmitry Mazepin founded UralChem Group and acquired several fertilizer producers. He was later sanctioned and lost a legal challenge to European Union sanctions in 2023. The EU said Mazepin was involved in a sector that provided revenue to the Russian Government in their ruling.
Mazepin was one of the last Russian businessmen to meet with Putin before Russia invaded Ukraine, according to a report from Bloomberg citing the Kremlin website. Mazepin had to give up control of UralChem as part of sanctions.
The new agreement, which could push Russia's agriculture exports forward, could be good for the country and help the government raise money to support the war cause or to get the country back on its feet if a full ceasefire is reached.
Russian billionaires will likely fight for control of their companies, which could be an upcoming battle to watch.
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