Louis Dreyfus Trader Exodus Leaves Hole in Grain Business


A group resignation of Louis Dreyfus Co.’s grain traders, which sparked a crisis forcing top executives to end a trip in Asia and fly back to Geneva, will leave a significant hole in one of its most important businesses.

While the company has quickly moved to replace former global head of grains, David Ohayon, it will take time to fill the positions in the lower ranks. At least five other traders in the business left on Tuesday, including the regional head of grains for Europe and the Black Sea, according to people familiar with the matter.

The departures were due partly to disagreements over trading strategy, said one person with direct knowledge, who asked not to be identified because the discussions were private. Dreyfus wants to focus on trading of its physical grain assets, rather than proprietary buying and selling of paper contracts, the person said.

The 166-year-old trading house run by billionaire Margarita Louis-Dreyfus has long been a top-tier player in global grains, particularly in countries part of the former Soviet Union. The company is the sixth-largest exporter of Russian wheat, customs data tracked by OOO ProZerno show. It’s also one of the top 10 movers of Ukrainian grain, according to UkrAgroConsult.

“Grains are one of the oldest activities of LDC. They are one of the world’s leading traders of the commodity,” Jean-Francois Lambert, an industry consultant and former commodity trade finance banker with HSBC Holdings Plc, said by email.

“As Black Sea origins grew in quality and quantity, LDC developed its reach and clout in the region over the past 15 years,” he said, using an acronym for Louis Dreyfus.

A spokeswoman for the company in Geneva declined to comment further on Ohayon’s resignation or other changes.

The departures come at a time when some of the largest agriculture trading houses are struggling to generate profits from their bread-and-butter business: buying and selling wheat, corn, and other foodstuffs around the world.

Bumper harvests caused grain prices to plummet over the past five years, diminishing volatility and trading opportunities. In February, Archer-Daniels-Midland Co. disclosed losses from its global trading desk in Rolle, Switzerland.

Among the Dreyfus traders that left were Cesar Soares, the regional head of grains for Europe and the Black Sea, and Pascal Durouchoux, a senior trader in Geneva, according to people familiar.

Chief Executive Officer Gonzalo Ramirez cut short a trip in Asia on Tuesday to return to Geneva to deal with the departures, the people said.

The next day, Dreyfus released a statement naming Adrian Isman as the new global head of grains. Murilo Parada will take over Isman’s previous responsibilities as chief of juice merchandising, the company said.

Grains are at the core of the trading house founded by Leopold Louis-Dreyfus in the mid-1800s. The business remained a priority last year and the company allocated almost a third its total spending budget on the grains unit, according to its annual report.

“The grain business has been the first activity done by Louis Dreyfus,” Andree Defois, the founder of consultancy Strategie Grains and a former Dreyfus employee, said by phone. “This one has been the base, the cornerstone. And then, they developed a lot of other activities and trading in other sectors.”


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