Bunge is getting out of sugar trading and distribution after reporting a fourth-quarter loss. Its eight Brazilian mills can produce sugar and ethanol and have a capacity of more than 20 million tonnes.
Bunge Ltd. is exiting the global sugar trading business and has identified “a few interested parties” in the business as it moves to concentrate on its grains and oilseeds operations, the company’s chief executive said. Bunge is getting out of sugar trading and distribution after reporting a fourth-quarter loss, which increased pressure on CEO Soren Schroder to improve results at the 200-year-old agricultural merchant that has received takeover approaches from Archer Daniels Midland Co (ADM.N) and Glencore Plc.
Schroder told Reuters he thinks Bunge’s sugar trading business should have value to other industry members.“We’ve got a few interested parties so that will be our first path of action,” he said in an interview. Schroder declined to name the interested parties. Bunge is a major player in the global sugar industry, both as a trader and as a producer. Its eight Brazilian mills can produce sugar and ethanol and have a capacity of more than 20 million tonnes, according to Bunge’s website.
Large grain traders that make money by buying, selling, storing and shipping crops have grappled in recent years with global oversupplies. Thin margins have squeezed core commodity trading operations,including those of ADM, Bunge, Cargill Inc and Louis Dreyfus Co which dominate the grain industry and are known as the “ABCDs” because of their initials.