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It should come as no surprise, but there are reports of yet another nation trying to position itself to take advantage of the U.S./Chinese trade tensions. Nikolay Gorbachov (not sure if there is any relation to Mikhail), president of the Ukrainian Grain Association, stated that his nation sees big potential for increased grain and oilseed business with China and to quote, “The first reason is China’s consumption is rising, and the second is the trade war with the United States.” While China would not account for all of it, he expects Ukraine exports to reach the 55 to 65 MMT level over the next three to five years, compared with around 45 MMT currently. As they say, you have to may hay while the sun is shining and there would appear to be no doubt that Ukraine, Brazil, and others are trying to position themselves into the Chinese market while they have the opportunity.
We have not heard much about the plight of Bunge or its possible demise/takeover for some time, but it was in the news again this morning as quarterly earnings were released, which leaned to the disappointing side. Interestingly enough, problems were not from the grain unit as volumes there were up 3.4%, and gross profits were more than double a year ago at $354 million, but rather from soy crushing operations. This group took a $125 million hit and overall earnings for the quarter came in below expectations. While I do not know if this well reignites talk of a possible buyout and/or merger with another firm but do take note that ADM also released quarterly results this week, which more than tripled from a year ago. They are now looking at a company-wide net profit of $566 million. A tale of two companies indeed.
food as a weapon, what a concept, whodathunk?