31 January 2012 18:15 [Source: ICIS news]
HOUSTON (ICIS)--US agricultural products processor Archer Daniels Midland (ADM) said on Tuesday that worldwide demand for crops and agricultural products is continuing to grow at a stable rate.
"We remain optimistic about the long-term fundamentals of our business," said ADM CEO Patricia Woertz in a conference call with investors.
Earlier on Tuesday, ADM reported second-quarter 2012 net earnings of $80m (€61m), down by 89% from the same period a year earlier, as oilseed and corn profits slipped. Total net sales and other operating income reached $23.3bn.
"It was a tough quarter and the operating environment was challenging," said Woertz.
Looking ahead, ADM said the harvest in South America is beginning, and is expected to help maintain adequate global soybean supplies.
The effects of drought on the corn crop in Argentina remains to be seen, the company said.
Global protein meal demand continues to grow, led by Asia, but crush margins, while improved, remain weak, ADM said.
Oilseed processing has been running at about 80% of capacity, intentionally slowed, in part, by a lack of demand for diesel fuel in Germany.
In the bioproducts sector, ADM said ethanol margins are weak, with excess production amid reduced exports.
"While ethanol margins have been depressed, they could improve over the next few months if production capacity is reduced or driving miles go up," Woertz said.
Meanwhile, US corn sweetener capacity is expected to remain tight, driven by strong export demand.
($1 = €0.76)
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