Agricultural commodities merchant Bunge Ltd (BG.N) said on Wednesday the environment for its grain trading and processing business will remain challenging as demand falls on the back of an ongoing U.S.-China trade war.
The U.S. agricultural sector has suffered for more than a year from tit-for-tat tariffs, which have cut farm exports from North America.
Additionally, harvests of corn and soybeans are now lagging behind schedule after heavy rains and historic flooding delayed U.S. plantings in the spring.
In China, the world’s top pork consumer and producer, an outbreak of fatal pig disease African swine fever has reduced the need for soy imports used for livestock feed.
Bunge Chief Executive Officer Greg Heckman described market conditions as “uncertain and deteriorating” and said he expected headwinds to continue.
The company reported a better-than-expected quarterly profit on Wednesday, driven by higher margins on its edible oil products in North America and Brazil.
However, Heckman warned of a profit decline of 15 cents to 20 cents a share for the current year compared to a year earlier. The outlook excludes some items, such as Bunge’s investment in plant-based meat company Beyond Meat (BYND.O).
U.S. farmers are also holding off on selling soybeans to merchants like Bunge, anticipating higher prices.
The company’s earnings before interest and taxes from the agribusiness unit, which includes everything from crushing oilseeds to export of corn and wheat, fell over 68% to $153 million.
The company’s operations in Brazil and Argentina helped it offset the impact of the U.S.-China trade war on its U.S. business. Bunge is also streamlining its operations and cutting costs as part of its restructuring program.
“The results on the quarter represented a solid, albeit noisy beat,” Stephens analyst Ben Bienvenu said.
Bunge took a $1.7 billion charge related to its Brazilian sugar and bioenergy business joint venture with British energy company BP Plc (BP.L).
The joint venture, BP Bunge Bioenergia, will merge the two companies’ Brazilian sugar and ethanol operations to create the world’s third-largest sugarcane processor. Bunge has tried to sell its sugar operation in Brazil in the past with no success.
Excluding items, the company earned $1.41 per share, beating analysts’ expectation of 48 cents, according to Refinitiv IBES data.
Net sales fell 9.5% to $10.32 billion, missing analysts’ estimate of $11.31 billion.
By Arundhati Sarkar and Tom Polansek
Source: Reuters
The Coca-Cola Co. has promoted Evguenia (Jeny) Stoichkova to president of global ventures, effective Jan. 1, 2023. Ms. Stoichkova joined Coca-Cola Bulgaria in 2004 and was most recently the president of the company’s Eurasia & Middle East division, a role she has held since 2021.
US-based Perfect Day, is partnering with Onego Bio, which specializes in creating animal-free eggs, aiming to accelerate the timeline to bring the eggs to the market. The business, with the use of its technology, plans to commercialize animal-free ovalbumin, the most abundant egg white protein extracted through precision fermentation.
Food waste costs the EU €143 billion per year (US$141.7 billion), with a report by Feedback EU raising the alarm of how it’s vital to reduce waste from farm to fork 50% by 2030 and the only way this will be achieved is by enforcing a mandatory directive forcing the food industry to do better and retailers to pay a tax of food waste.
