09 February 2012 18:07 [Source: ICIS news]
HOUSTON (ICIS)--US-based agricultural processor Bunge expects its sugar business to soften in 2012 in response to an ongoing drought in Brazil, the company said on Thursday.
"While our sugarcane harvest will be down because of the drought, we expect to crush 17m–19m tonnes of sugarcane," said Bunge CEO Alberto Weisser during a conference call with investors.
Bunge has the capacity to crush 21m tonnes/year of sugarcane in Brazil.
Earlier on Thursday, Bunge reported net fourth-quarter 2011 earnings fell by 16% to $245m (€184m), partly because of reduced sugarcane yields in Brazil.
Bunge's fourth-quarter net sales rose to $16.45bn from $12.73bn in the same period in 2010. Gross profit in the quarter fell by 11% year on year to $736m.
Bunge's South American oilseed crushing business is also expected to be down in 2012 as the drought that has affected Brazil and Argentina will decrease the amount of the current season's soybean harvest, Weisser said.
Bunge grows 60% of the sugarcane it processes into sugar and ethanol and acquires 40% from third parties.
Weisser said the company's goal is to produce 70% of its sugarcane usage – an objective he said would be accomplished in 2012.
Bunge said its grain merchandising business should do well this year, as strong farm economics will lead to increased planting, resulting in large crops and increased trade that will provide volume growth.
Oilseed processing should do well, since Bunge expects continued strong performances in European sunseed and Canadian canola processing.
Weisser said US soybean and European rapeseed processing operations will be challenged until the new crops are harvested in the second half of the year.
($1 = €0.75)
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