Grain traders are making big profits as supplies are disrupted by the war in Ukraine and other factors.
Archer Daniels Midland (ADM) reported a 53% increase in profit for its first fiscal quarter, compared with last year. Bunge had quarterly adjusted earnings 36% higher than last year's. CHS Inc., a farm cooperative that does some grain-trading, posted a profit of $219 million this quarter, compared with a loss last year.
The results are almost entirely attributable to high prices for grains, especially wheat, which went up about 40% this year. Bunge had a 7% decline in sales volume for its agribusiness unit but a rise of almost 15% in dollar sales.
Factors besides the war that push grain prices up include the lingering pandemic and a poor crop in South America this year.
“From a global pandemic to the short crop in South America to the conflict in Ukraine, it has become clear that we cannot take an abundant and efficient supply of food for granted,” ADM CEO Juan Luciano said on a conference call quoted in the Wall Street Journal.
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