By Karl Plume and Ruhi Soni
(Reuters) – Global agricultural commodities trader Bunge on Wednesday reported an increase in quarterly adjusted profit and raised its full-year profit forecast by 21% on robust demand and tighter supplies of essential crops since the invasion. from Ukraine to Russia.
The war exacerbated the already scarce supply of grains and oilseeds after crop failures in South America and other important production areas, increasing demand and increasing processing margins for Bunge’s crops.
The results are in line with the robust gains reported by rival Archer-Daniels-Midland Co on Tuesday.
Bunge shares rose 5% to $120.80 on the New York Stock Exchange after hitting a record high last week and are up nearly 30% this year.
Bunge’s results highlighted how global grain traders weathered rising crop prices and supply chain disruptions triggered by the Russia-Ukraine war. The two nations supply nearly a third of the world’s wheat exports, a fifth of the corn traded globally and about 80% of the sunflower oil.
The world supply of grains and vegetable oils will not recover from disruptions caused by the war for “a long period of time”, so other producers and processors, mainly in South America, will have a greater role in containing food inflation, said Bunge Chief Executive Greg Heckmann.
“There will be a long extension of this because the infrastructure has been damaged. There are maritime logistics that need to be resolved. There are waters that need to be demined,” he said.
Bunge’s port facility in Mykolaiv suffered damage in the fighting last month, but company executives said on Wednesday it did not appear to be significant.
Bunge raised its full-year adjusted earnings forecast to $11.50 a share from $9.50 previously and said the forecast has “upside potential” as tight supply and strong demand persist.
Excluding point items, earnings were $4.26 per share, compared with $3.13 per share a year earlier, beating analysts’ consensus estimate of $2.94, according to Refinitiv IBES.
(By Ruhi Soni in Bangalore and Karl Plume in Chicago)
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