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A view of the damage to the Nika Tera grain terminal, as Russia's attacks on Ukraine continue, in Mykolaiv, Ukraine, on June 12.EDGAR SU/Reuters

Russian attacks on two massive food storage terminals controlled by Canadian-owned Viterra and U.S. grain handling company Bunge Ltd. in Ukraine are putting further pressure on the already stressed global food network.

Nobody was killed at the Viterra facility, but one employee suffered minor burns and received medical attention, spokesperson Jeff Cockwill said in an e-mail to The Globe and Mail confirming that a missile strike damaged the Everi vegetable oil terminal in Mykolaiv.

Mr. Cockwill would not disclose the extent of the damage to the terminal, whether a fire that broke out on Wednesday after the missile strike was still burning, and if the facility is operational. The Everi terminal was built in 2010, and expanded in 2018. It has a storage capacity of 160,000 metric tonnes, with the ability to hold up to to 1.5 million metric tonnes of vegetable oil.

On the same day, Russian forces also struck a grain facility owned by St. Louis-based Bunge Ltd. in the same Black Sea port city. But unlike the Viterra plant, which was operating before it was attacked, the Bunge facility was shut down earlier this year after the Russian invasion began. It also sustained damage during fighting in March.

Countries around the world are scrambling to find ways to move food out of Ukraine’s ports after Russia’s invasion in February cut off exports and touched off a global food crisis.

Before the war, Ukraine — a major producer of wheat, corn and vegetable oils — exported enough food to feed 400 million people, most of it through the country’s seven Black Sea ports.

But since the invasion millions of metric tons of grain have been stranded in silos, ports and ships. Even before this week’s attack on Viterra, farmers in Ukraine already faced a storage crisis – with grain harvest about to begin, and storage infrastructure still sitting half-full.

Meanwhile, sanctions on Russia and its allies — major producers of grain, as well as fertilizer and cooking oil too — have prevented them from exporting those products widely, a further strain on the food supply.

The world’s poorest countries are feeling the greatest impact from the war’s disruption of the global supply chain. Many countries in the Middle East and Africa rely on the region for staple foods. Lebanon, for instance, gets about 80 per cent of its wheat from Ukraine.

As a result of the shortages, food prices around the world have soared. In the immediate months after Russia’s invasion, export prices for wheat and corn skyrocketed by more than 20 per cent.

But while the attacks on Viterra and Bunge will further tighten supply in the global grain market in the short term, relief is in store over the coming six months, said Seth Goldstein, an analyst with the financial services company Morningstar Inc. That’s because of the recent strong harvest in Brazil, as well as favourable weather during planting season in North America, which points to a bumper harvest in the fall.

“That should take the pressure off,” he said.

In addition, negotiations continue between the United Nations and Russia that may allow Ukraine and Russia to export grain, as well as fertilizers, to countries in need.

“As those talks continue, there’s hope that there can be an agreement reached, that would quickly alleviate some potential food shortages,” Mr. Goldstein said.

Unless the war is resolved immediately, the World Food Programme says, an additional 47 million people around the world will be thrust into acute hunger, up from 276 million at the start of this year. “We’re running out of time,” WFP executive director David Beasley said last month. “The cost of inaction will be higher than anyone can imagine.”

As of the end of last year, Viterra held assets worth US$417-million in Ukraine.

Viterra’s biggest shareholder is Anglo Swiss mining and commodities trading conglomerate Glencore AG, but two Canadian pension funds, CPP Investments and British Columbia Investment Management Corp., also own significant stakes.

Until a decade ago, Viterra was a publicly traded Canadian-based company. Through the 2000s, it was run by well-known agribusiness executive Mayo Schmidt, who transformed the regional co-operative into a global fertilizer, crop chemicals and seed giant. It now has operations in North America, Australia, India, China, Japan and several European countries, including Switzerland, Italy and Germany. In 2012, Viterra was acquired by Glencore for $6.1-billion. Glencore later sold half of the business to CPP Investments and British Columbia Investment Management Corporation.

Viterra contributed US$473-million to Glencore’s earnings in 2021, more than double the year before. Despite the contribution to profit, Glencore believes investors undervalue Viterra. Gary Nagle, the CEO of Glencore, said in a conference call earlier this year that he is weighing ideas to get better value for Viterra.

Analysts have speculated that Glencore might sell part, or all of its stake, or spin off Viterra into a separate publicly traded company. One reason the market undervalues Viterra is investors don’t have in-depth access to its full financials, meaning it is harder to ascertain its true market value. Since Viterra is not majority-owned by Glencore, it discloses only sparse details according to the parameters of equity accounting rules.

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