(Reuters) – U.S. agribusiness Archer Daniels Midland Co is scaling back its modest-sized sugar trading operations and the London-based head of that business has left after less than four years, trade sources said, a sign of the sugar market’s deepening woes.
Alberto Peixoto joined as global head of the company’s sugar desk 3-1/2 years ago, according to his LinkedIn profile.
ADM, which is one of the world’s largest commodities traders, is not considered a sugar heavyweight but the move was still considered significant as the latest sign of sugar industry’s struggles and because of Peixoto’s tenure in the industry.
Peixoto declined to comment. The company said it did not comment on rumours, speculation or personnel matters.
Peixoto was previously head of the sugar desk at Bunge Ltd and of sugar and ethanol trading for Tate & Lyle Industries, according to LinkedIn. He got his start trading coffee for Cargill.
The move is a sign of waning enthusiasm for the cane sector in recent years, said Michael McDougall, director of commodities for Societe Generale in New York.
ADM is exploring a sale of its mill in Limeira do Oeste, where it produces ethanol, a spokesperson has told Reuters.
Multinational traders like Bunge Ltd have looked to sell the investments they made in the last decade in the cane sector in Brazil, the world’s largest producer and exporter of sugar.
“Brazil has gone from a shining vision of sugar and ethanol to a morass of ill-kept cane fields,” McDougall said.
Like the milling business, trading of the sweetener has grown increasingly competitive in recent years due to excess supplies and a crowded marketplace.
ADM is in the process of refocusing on grain trading, selling its fertiliser operations in South America and also agreeing deals to sell its cocoa and chocolate businesses.
The company last year also took full ownership of grain trader Alfred C. Toepfer International. (Reporting by Sarah McFarlane and Nigel Hunt; Additional reporting by Chris Prentice in New York and Tom Polansek in Chicago; Editing by David Holmes, Bernard Orr)