Cargill, the US-based agriculture trading group, has doled out $200m for a stake in UkrLandFarming, Ukraine’s largest agribusiness holding, in a potentially far-reaching deal that sources said would see both groups partner up in future grain exports to China and other growing markets.

The deal, for 5 per cent of the holding, boosts Cargill’s already strong trading presence in one of the world’s most promising agriculture commodity producers. It comes amid reports that China was increasingly rejecting imports of genetically modified US corn as it stepped up organic purchases from Ukraine.

The transaction puts a value of $4bn on UkrLandFarming, the world’s eighth-largest land cultivator and second biggest egg producer through its 77 per cent ownership in London-listed Avangardco.

The conglomerate was founded and built up in recent years through acquisitions by Mr Oleg Bakhmatyuk, a Ukrainian billionaire.

“The transaction will help Cargill secure long-term supplies from one of Ukraine’s largest farmers, and gives UkrLandFarming a very strong strategic partner that will help them achieve their goals of broadening exports, especially in Asia,” said Nick Piazza, chief executive of Kiev-based investment bank SP Advisors.

Ukraine, which harvested a record corn harvest last year of 29m tonnes, hopes to boost exports this season by some 35 per cent to 18m tonnes, catapulting the eastern European country to the ranks of the world’s top corn exporters. It now vies with Argentina for the rank of the world’s third largest corn exporting country.

Ukraine made its first corn shipment to China late last year, as part of a $3bn loan-for-corn deal brokered by state companies in both countries.

Last year, Mr Bakhmatyuk said UkrLandFarming hoped to sell up to 700,000 tonnes of corn to China this season, boosting total annual exports within five years to reach 6m tonnes with one-third destined for Asia.

The deal comes amid Ukraine’s deepest political crisis in a decade.

Home to some of the world’s richest farming land, Ukraine earned the title “Breadbasket of Europe” centuries ago for its ability to feed growing populations.

Cargill opened a Ukrainian operations base in 1991. In recent years it has acquired or built grain silos, sunflower seed processing capacity and an animal feed mill in the country.

Rival traders, including New York-listed Bunge and Archer Daniels Midland and Swiss-based Glencore, also have businesses in Ukraine including processing plants and export terminals on the Black Sea.

Cargill confirmed its 5 per cent stake in UkrLandFarming but said it did not have any intention to control, manage or operate the business.

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